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Ethereum options are about to expire, will ETH price drop further?

A large number of Ethereum options contracts are set to expire soon, but will they shake up the ETH price and cryptocurrency markets?

Cryptocurrency derivatives traders lately have been more indulging in options for Ethereum than those for Bitcoin. As a result, ETH options contracts are about to expire.

Moreover, they have a maximum pain point of $1,950 and a notional value of $4.2 billion.

The extreme pain point is the strike price with the most open Ethereum option contracts. In addition, it is the price at which the asset causes financial losses to the largest number of contract holders at expiration.

It also happens to be very close to the price that Ethereum is trading at at the moment.

Options allow speculators to buy or sell Ethereum at a set price, the strike price, with the “option” to sell at any time. It is more flexible than futures contracts that have fixed expiration dates.

Bearish ethereum options

The buy/sell ratio for Ethereum options is 0.83, and anything higher than 0.7 to 1 is generally It is considered bearish.

The buy/sell ratio is calculated by dividing the number of traded (short) sale contracts by the number of (long) buy contracts. Values ​​higher than 0.7 or 1 are considered bearish because more traders are buying short contracts than long contracts.

Ethereum Options OI – Twitter /@tweet

Moreover, around 25,000 bitcoin options contracts are also set to expire soon. These have a maximum pain point of $29,000 and a notional value of $0.72 billion, according to Greeks Live.

The buy/sell ratio for bitcoin options is 0.7, which is generally considered neutral.

Therefore, current ratios do not tilt significantly in any direction, so market impact should be minimal when they expire.

ETH price decline

Kraken wallets have withdrawn a large portion of their ETH stack over the past day or so. The move was bearish for Ethereum, which is starting to retreat from its eleven-month high.

ETH price is down 8.5% since its 2023 high on April 17. It is trading flat on the day at $1.947 at the time of writing.

ETH Price 1 Week - BeInCrypto
ETH Price 1 Week – BeInCrypto

The resistance at $2,100 was too strong to overcome, and the market is about to correct. More downsides could see ETH find support in the $1850 price area.

Disclaimer

Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.

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