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Saturday, October 16, 2021

Ethereum Traders Predict Volatility Before Friday’s Option Expiry

Ethereum’s Ether (ETH) will be confronting a monthly critical options expiry worth $820Mn on 27th August, Friday. That is going to be the first opportunity for options worth $3000 and more to actually be a reality. This is in spite of bulls seemingly missing out on a great opportunity for dominating the expiry. The miss was chalked up to them being overly optimistic regarding the price potential of ETH.

Ethereum Prices Will Be Impacted By Competition

Ethereum’s network has recently struggled because of the success it has achieved. It has repeatedly resulted in network congestion as well as gas fees being $20 and more. Moreover, as NFTs and DeFi rose, further stress was imposed on Ethereum’s network.

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As such, it is speculated that the inflow that would have sent Ethereum’s price up may have gone instead to the competitors. For instance, Cardano (ADA) reported a surge of more than 100% in the ongoing quarter. Investors are expecting the launch of its smart contracts on 12th September. It has been awaited for a long time.

Another contender of smart contracts, Solana (SOL) took hold of 1/3rd of investment inflows into crypto products in the previous week. Finally, Polygon (MATIC) has reported gains of 150% as well, after successfully incorporating DeFi projects in its pool of interoperability.

The simple analysis weighing buy options against sell options suggests that the expiry must happen over $2,900 to ensure a favorable outcome. In the best-case scenario where the options expiry happens above $3,200, the net result will favor instruments in between neutral and bullish by $197Mn.

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Bears will seek to mitigate the damage as much as possible. Fortunately for bears, the final prize for a price move that is favorable looks unworthy of any significant bullish efforts.

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