Bitcoin
BTC$51 321.39

-1.01%

Ethereum
ETH$2 970.08

-0.04%

Tether
USDT$0.999407

-0.07%

Binance Coin
BNB$381.98

0.94%

Solana
SOL$101.64

-3.39%

XRP
XRP$0.540875

-1.48%

Monthly $1.9B Ethereum futures and options expiry will determine if ETH hits $3K soon


28 May 2021

#Ethereum

Ethereum bulls may have flipped $2,400 back to support, but Friday’s ETH options and futures expiry will determine if traders press the pedal for $3,000. The May 28 futures and options expiry could be a turning point for Ether (ETH), as the cryptocurrency rebounded 60% from its $1,730 low on May 23. Even though the open interest stands at $6.2 billion, only 16% is set to expire on Friday, as most of the action takes place on perpetual and June contracts.

One must account for the options expiry, as it could present an imbalance of forces. This feature is not true for futures markets, where longs (buyers) and shorts (sellers) are matched at all times. Options are divided into two independent segments: call (buy) options, which are most commonly used for neutral-to-bullish strategies, and neutral-to-bearish put (sell) options.

Therefore, while Ether futures longs and shorts are matched at all times, options markets provide a clear picture of whichever side takes the advantage.

Ether’s futures open interest was drastically reduced after the correction

The relentless drop initiated after the $4,380 all-time high on May 12 took 11 days, and the price eventually bottomed at $1,730. However, the low prices did not last long, and Ether quickly reestablished support at $2,400. The open interest on futures was reduced by 54% to $5.2 billion as leverage longs were liquidated and short-sellers took profits.

As for the $980 million in Ether futures set to expire on Friday, crypto exchange Huobi takes the lead with $300 million in open interest. CME closely follows it; however, CME traders traditionally roll over most of the positions over the past couple of trading days, so this number could be greatly reduced as we approach the deadline.

At first glance, options favor neutral-to-bullish call options

For the May 28 expiry, there are 189,000 call (buy) Ether options stacked against 153,900 put (sell) options. This initial analysis gives the neutral-to-bullish calls a 23% advantage. However, one must account for the fact that a right to buy Ether at $3,200 or higher in less than 16 hours isn't particularly desirable right now. The same can be said for the ultra-bearish put options at $2,300 and lower. To correctly analyze the potential pressure from Friday's expiry, one should exclude both extremes.

Notice how $3,000 is a decisive level for bulls as there are 30,700 call options stacked there versus 15,000 put options. This means that if bears manage to keep Ether below that price, the neutral-to-bullish call options amount to 54,500 ETH, equivalent to $150 million.

Meanwhile, the neutral-to-bearish put options at $3,000 and above total 52,700 ETH, which is $145 million in open interest. This results in a balanced force from the options expiry.

Bulls have little incentive to push the price above $3,000

If bulls decide to display strength, pushing the price above $3,000, the difference will shift by 45,700 ETH contracts, worth $125 million. Albeit significant, it's probably not enough to make the price higher.

Futures traders have been less than optimistic after the recent heavy liquidations reported by Cointelegraph on May 24. Regarding options, pressures from calls and puts seem balanced at the present level and should present no surprise on Friday.

Huobi, OKEx and Deribit expiries take place on May 28 at 8:00 am UTC. The CME futures and options happen a little later during the day at 3:00 pm UTC.


Related

Crypto may be ready for a new leg down
Crypto may be ready for a new leg down
Cryptocurrencies wait for a signal
Cryptocurrencies wait for a signal
What are dynamic NFTs?: Use cases and examples
What are dynamic NFTs?: Use cases and examples
Shanghai Upgrade Fires Up ETH and Altcoins
Shanghai Upgrade Fires Up ETH and Altcoins
Challenges of data accessibility in the NFT market
Challenges of data accessibility in the NFT market
Is the A.I. revolution about to pump Nvidia stocks?
Is the A.I. revolution about to pump Nvidia stocks?
Five tips for investing during a global recession
Five tips for investing during a global recession
What is NFT ticketing and how does it work?
What is NFT ticketing and how does it work?
The crypto market is cheaper than a trillion again
The crypto market is cheaper than a trillion again

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 61.2% 78 $51 321.39 -1.01% -1.18% $1 007 692 041 556 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 63.2% 76 $2 970.08 -0.04% 5.19% $356 888 554 759 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 91.6% 1 $0.999407 -0.07% -0.15% $97 783 839 269 USDT 7 days price change
4 Binance Coin (BNB) BNB Binance Coin predictions 69.2% 63 $381.98 0.94% 7.61% $57 122 110 921 BNB 7 days price change
5 Solana (SOL) SOL Solana predictions 75.2% 53 $101.64 -3.39% -10.60% $44 820 445 776 SOL 7 days price change
6 XRP (XRP) XRP XRP predictions 86.8% 21 $0.540875 -1.48% -3.87% $29 509 391 184 XRP 7 days price change
7 USD Coin (USDC) USDC USD Coin predictions 96% 1 $1.000078 0.01% 0.01% $27 984 520 970 USDC 7 days price change
8 Cardano (ADA) ADA Cardano predictions 67.2% 64 $0.586269 -2.03% -3.60% $20 791 742 444 ADA 7 days price change
9 Avalanche (AVAX) AVAX Avalanche predictions 68.8% 61 $36.78 -2.34% -11.59% $13 873 006 300 AVAX 7 days price change
10 Wrapped TRON (WTRX) WTRX Wrapped TRON predictions 71.2% 60 $0.139158 -0.09% 6.33% $12 248 949 216 WTRX 7 days price change
11 TRON (TRX) TRX TRON predictions 71.2% 60 $0.138928 -0.56% 5.92% $12 228 675 321 TRX 7 days price change
12 Dogecoin (DOGE) DOGE Dogecoin predictions 88% 12 $0.084094 -0.63% -1.49% $12 040 838 074 DOGE 7 days price change
13 Chainlink (LINK) LINK Chainlink predictions 67.6% 68 $18.12 -2.55% -9.17% $10 638 341 760 LINK 7 days price change
14 Lido stETH (STETH) STETH Lido stETH predictions 91.6% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
15 Polkadot (DOT) DOT Polkadot predictions 76% 50 $7.49 0.22% -3.63% $9 603 442 412 DOT 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2024 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.