Ether (ETH) entered a strong rally process as of April 25, resulting in a 90 percent increase pushing the price up to $ 4,200. The intense interest in decentralized finance (DeFi) applications triggered this increase. The total amount locked exceeded $ 74 billion, up 51 percent in 18 days.
This positive momentum has neutralized expectations for a drop in put options in the futures market. This gives the bulls more incentive to continue the rally. On May 14, a total of $ 730 million of Ether options will expire, and control appears in the bulls, as call options dominate.
Decentralized exchange (DEX) trading volume reached a record high on May 9 and exceeded $ 5 billion. This amount roughly corresponds to the average daily volume of the Coinbase exchange and has increased by 150 percent compared to the previous month.
Actually the data seems to be in favor of the bears
Regardless of the rally reasons for the Ether price, the expiry of weekly options became more important as the amount of open positions increased. These data mean that traders should not overlook the importance of 176,000 Ether option contracts due on May 14th.
Currently, 76,700 call option contracts worth $ 228 million are due today. The buyer of the call option can get Ether for a fixed price in the future. As a result, this instrument is used more frequently in neutral to bullish transition strategies.
On the other hand, put options provide the buyer with protection from negative price fluctuations. Therefore, these are necessary for neutral-to-declining strategies, and there are now a total of 99,000 contracts, $ 371 million open positions for May 14.
Deep inside there are different consequences
These data reflect the bearish scenario at first, as the 0.77 value in the trade ratio shows. That said, it’s not a good idea to have the right to sell Ether at $ 3,200. Consequently, these options are traded under $ 12.
The recent bull market led to 85 percent of put options sinking, as there are only 16,000 Ether contracts with a premium of $ 3,700 and above.
This $ 60 million open position seems unrelated to a 45,000 call option targeting $ 3,800 or lower. These contracts are currently worth $ 169 million and give the bulls a net benefit of $ 109 million.
Looking at the long-term outlook, it is possible for the Ether price to reach $ 5,000 unless there is pressure from the regulatory front in the United States.
Investors and market makers are currently closely following SEC Chairman Gary Gensler. Despite recent comments with Congress, no date has been pronounced for establishing regulatory rules.
The opinions and comments expressed here are only to the author belongs. It may not reflect Cointelegraph’s views. Every investment and trading transaction involves risk. When making your decision, you should do your own research.