On June 25, more than $1.5 billion worth of Ethereum options are expiring, keeping both bears and bulls on their toes at the moment. In less than two weeks, the expiry will come into force and different factors will come into play when determining the future.
Ethereum Mega Options Expiry
Options are a kind of derivatives that are available for most commonly traded assets around the world. Oil barrels, Gold, Silver, and the top cryptocurrencies, all have options trading and it is considered one of the most popular derivative financial instruments around the world. Ethereum options are also heavily used by derivative traders and now market forces have resulted in a massive $1.5 billion options expiry later this month.
What will happen to the ETH price index in the buildup to the expiry and then in its aftermath?
As always there is no clear answer, but it does depend on circumstances. Previously, on March 26, a 30% less figure was due to expire and after that happened, the second largest cryptocurrency tanked, resulting in a 17% depreciation. This was back when the index was nearing $2,000. But, it took a sizeable tumble and bottomed out at around $1,550.
However, the circumstances are different this time. Bitcoin, Ethereum and the rest of the market have already faced a considerable price correction 3 weeks ago when the index came down from record highs to multi-month lows in a matter of days. Ethereum was above $4k and looking to go towards $5k but it is now hovering around $2.4k at press time. So, the previous conditions may not be applicable this time around.
Currently, there are a mixture of bullish and bearish indicators on the market and obviously the derivatives market follows that. The cryptocurrency’s index is in considerably oversold territory and looking to post a net gain in the short-term future. However, at the same time various upgrades that Ethereum users had pinned their hopes on are doing little to improve the system overall. The highly anticipated EIP 1551 upgrade may not solve much of the gas problems for the network. The last Berlin upgrade however, did make things a little better and brought fees down but it is true that the upgrades are slow to make change and the economics of things are a little weak overall.
One thing is certain; Ethereum traders will be glued on their screens on June 25 to see how the cryptocurrency responds to the latest options expiry.
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