Ethereum Options Expiration and Price Movement
The recent Ethereum bounce on August 31st was short-lived as the price quickly dropped below $1,650 due to selling pressure. In the last 24 hours, ETH has traded 3.21% down amidst a broader sell-off in the crypto market. Around 143,000 ETH options are set to expire, with a Put Call Ratio of 0.85 indicating a balance between bets on price decrease and increase. The “max pain” level, where most options are likely to expire worthless, is $1,700. The combined notional value of these options is $230 million.
Factors Influencing Price Movement
Both Bitcoin (BTC) and Ethereum dropping just before expiration is uncommon and could be caused by a delay in ETF approvals, leading short-term bullish gaming funds to exit. During this week’s ETH options expiration, a significant portion was centered around the $1,500 to $1,600 range. While the volume of ETH put options wasn’t extensive, many buyers held their positions until the end. The market experienced limited volatility, and the Implied Volatility (IV) level continued to decrease. Based on recent market trends, sideways movement is expected in the short term.
Ethereum Price Support Zones
The ETH price has been facing selling pressure and currently hovers around $1,650. The immediate support level for Ethereum is $1,630 after a failed recovery attempt above $1,700. Looking at the daily chart, there is a concerning scenario unfolding for ETH price. There is a potential for a significant 30% drop below the breakout point between $1,630 and $1,140. The presence of a descending triangle pattern on the chart adds to the challenges Ethereum’s recovery might face, with a potential downtrend extending to $1,140 before an anticipated uptrend during the bull market.
Hot Take
The expiration of Ethereum options and the subsequent price movement can be influenced by various factors. While the market experienced limited volatility during this week’s expiration, the potential for a significant drop in price exists. Traders should closely monitor the support zones and the presence of patterns on the daily chart to make informed decisions. It remains to be seen how the ETH price will align with the anticipated uptrend during the bull market.
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