In the last days Bitcoin (BTC) price rose to nearly $ 14,000, and Ether (ETH) followed with an equally strong performance. But the altcoin couldn’t stay above $ 400 physiological support.
Although the price of Ether is under $ 400, Data shows traders are not concerned about options expiring this Friday. Investor optimism has remained intact despite the fact Recent mediocre decentralized finance (DeFi) performance.
$ 80 million worth of ether options expire this Friday, but October has never been a strong argument. For beginners, that number pales in comparison to the December and March numbers of $ 282 million.
Even with a more detailed perspective, The October options are somewhat balanced between call and put options. This data reflects an indecisive market that is neither bullish nor bearish in isolation.
As we can see in the previous data, There are roughly the same number of call options betting on prices as low as $ 410, while there are put options aiming at lower prices. The scenario becomes even more balanced after the inclusion of OKEx numbers favoring put options at 2,500 ETH.
The main reason for interest in options for the month of October is that Publication of the proof of stake consensus for Ethereum 2.0 in preparation. For investors wishing to open leveraged bets on this event, The odds are from December to March 2021. This logic applies to both bulls and bears, and thus significantly reduces investor appetite for short-term options.
If you look at the $ 200 million open positions from the December options, you’ll get a better idea of how investors are positioning themselves in anticipation of the next Ethereum network update. Bullish strategies take advantage of this “event” around 62% of these options.
Option prices signal optimism
For those who are not familiar with this Mentioned “Delta” in these charts, this indicator comes from the Black Scholes option pricing model. This represents the mathematical probability that Ether will be above the option price on the expiration date due to its volatility. For example, the price of current options shows a 33% chance that the price will exceed $ 460 by December 25th.
Investors then compare the call and set options with similar odds. In a balanced market, traders should charge roughly the same premium for both options with a delta (quota) of 25%.
Whenever the market Since you are unwilling to take any downside risks, the indicator slopes negatively. On the other hand, A positive 10% delta indicates that traders charge less premium (risk) in order to hedge upwards.
In the graph above, we see a relatively constant optimism. The 25% gradient of the delta was -11% in the last two months. While not an exaggeration, it certainly shows that despite the recent failure to maintain the $ 400 support level, sentiment has not changed.
The major traders are currently net long positioners
To further confirm whether this optimism reflects investor positions, Long-to-short data provided by an exchange should be analyzed to understand the positioning of key Ether traders. By checking the positioning of the top traders locally, on perpetual exchanges, and futures exchanges, you can see more clearly whether the traders are bullish or bearish.
There are occasional inconsistencies in the methods used by different exchanges, according to viewers You should be aware of these changes, not the absolute numbers.
As shown in the graphic above, There have been no relevant changes in the positions of the main Ether traders. The decline in Huobi is more than offset by the increasing long position in OKEx. Binance numbers were not included as they barely moved from 1.06 earlier this month to the current 1.01 level.
Despite the 7% drop in ether price since last week and a relatively significant lack of appetite for short-term options we can see that there are no bearish signals.
This is because the option price indicator is tilted by 25% and the long-short ratios of the major traders on crypto exchanges. They easily prefer the cops.
However, investors are focusing Your bets on the terms of December and March, This seems to make sense as the Ethereum network could see the most important update in its history.
At least for now These traders are confident that $ 400 will serve as a support level going forward. Regardless of what happens during tomorrow’s expiry, you should pay attention to the indicator of the 25% slope of the options delta and the long-short ratio of the big traders.
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