Ether (ETH) flirted with its $four,380 all-time loftier on October. 21 simply failed to breach information technology by a few dollars. Some analysts, including independent market place analyst Scott Melker, believe that an exchange-traded fund (ETF) approval is the next logical footstep for the U.South. Securities and Exchange Commission (SEC).

Even so disappointed Ether bulls might be, they are likely to score a $78 one thousand thousand profit on Oct. 22'southward options expiry. Bears were apparently defenseless off-guard every bit Ether accumulated a 35% gain calendar month-to-date.

Ether cost at Bitstamp in USD. Source: TradingView

Investor sentiment was also positively impacted by the pension fund for firefighters in Houston, which announced a $25 million allocation in Bitcoin (BTC) and Ether.

The abiding reduction of Ether's liquid supply is too a primal gene behind the contempo rally. Co-ordinate to Glassnode data, the Ether balance on exchanges reached a ii-year low.

Ether balance on exchanges. Source: Glassnode

Having fewer coins deposited on exchanges, especially for Ether, could mean that investors are moving to decentralized finance (DeFi) in search of better yields. Although it doesn't forbid anyone from selling, this movement does create incentives for long-term holding, and then does the ETH 2.0 stake to go a validator.

Bears were stunned after Ether broke $4,000

Ether was trading below $3,000 only iii weeks ago and this partially explains why bears placed 89% of their bets on Ether trading at $iv,000 or lower on Oct. 22.

October. 22's expiry total open interest is represented past $230 million calls (buy) options stacked against $195 million puts (sell) options, a 27% pb for the neutral-to-bullish instruments. Still, this generalistic view needs further detail, depending on the decease price.

ETH options amass open interest for October. 22. Source: Bybt.com

The current long-to-curt metric is deceptive considering the recent Ether rally will likely wipe out virtually of their bearish bets. For instance, if Ether's price remains above $4,000 at 8:00 am UTC on October. 22, only $22 million of the put (sell) options will be available.

Bears need sub-$four,000 to balance the scales

Any expiry price higher up $4,000 favors the bulls, although most damage occurs to a higher place $4,200 as their cyberspace profit increases to $136 meg.

Below are the four likeliest scenarios considering the current cost levels. The data shows how many contracts will be available on October. 22 for both bulls (phone call) and bear (put) instruments.

  • Between $3,600 and $4,000: fifteen,640 calls vs. 14,340 puts. The net result is neutral.
  • Between $4,000 and $4,200: 25,000 calls vs. 5,440 puts. The net result favors bulls by $78 million.
  • Between $4,200 and $4,400: 34,180 calls vs. 1,890 puts. Bulls' turn a profit increases to $136 1000000.
  • To a higher place $4,400: 44,230 calls vs. 60 puts. Bulls completely boss by profiting $186 million.

As shown above, the imbalance favoring either side represents the potential theoretical profit from the expiry.

This rough gauge considers telephone call (buy) options used in bullish strategies and put (sell) options exclusively in neutral-to-bearish trades. However, a trader could have sold a put pick, finer gaining a positive exposure to Ether above a specific price. Unfortunately, at that place's no easy fashion to guess this issue.

$4,000 is likely to concur, at to the lowest degree until Friday's expiry

Bears need a 3% correction from the electric current $4,100 cost to avert a $78 million loss. Although it might non seem much at first, traders must also business relationship for recent positive newsflow and on-concatenation metrics.

With less than x hours ahead of the Oct. 22 decease, bulls are likely to secure a win by keeping Ether in a higher place $four,000. As for the bears, focusing on the $1.1 billion monthly expiry on Oct. 29 seems to exist the nigh logical route.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading motility involves gamble. Y'all should bear your ain research when making a decision.