Cryptocurrency News

The monthly $ 1.9B Ethereum Futures and Options expiry will determine whether ETH will soon reach $ 3K


The futures and options expiration of May 28 could be a turning point for Ether (ETH) As cryptocurrency reversed 60% from its $ 1,730 low on May 23. Even though the open interest is $ 6.2 billion, only 16% is scheduled to expire on Friday as most of the action is on permanent and June contracts.

The termination of alternatives should be noted as it may present an imbalance of forces. This feature is not true for futures markets, where longs (buyers) and shorts (sellers) are matched all the time.

The options are divided into two independent segments: call (buy) options that are commonly used for neutral-to-bullish strategies, and neutral-to-bearish put (sell) options.

Therefore, while Ether Futures Long and Short coincide all the time, the options market provides a clear picture of whichever side takes advantage.

Ether Price on Coinbase, USD. Source: Trading View

After the reform ether futures open interest was significantly reduced

It took eleven days for the continuing decline that began after the all-time high of $ 4,380 on May 12, and the price finally peaked at $ 1,730. However, the low price did not last long, and Ether quickly re-established support at $ 2,400. Open interest on futures was reduced by 54% to $ 5.2 billion as leveraged long was liquidated and short-sellers took profits.

For $ 980 million in ether futures ending on Friday, the Huobi Exchange leads with $ 300 million in open interest. CME follows this closely, however, as CME traders traditionally roll over most positions in the last few trading days, this number may be much lower as we approach the deadline.

Ether 28 May Futures Open Interest. Sources: Huobi, CME, OKX, Derebit, Bitmax

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

As of May 28, there are 189,000 call (buy) ether options against 153,900 put (sell) options. This preliminary analysis gives a 23% advantage to neutral-to-bullish calls. However, one should have the right to buy ether at $ 3,200 or more in less than 16 hours, which is not particularly desirable right now.

The same can be said for ultra-recessionary put options of $ 2,300 and under. To properly analyze the potential pressure from Friday’s end, both extremes should be excluded.

Note that $ 3,000 is a decisive level for bulls as there are 30,400 call options stacked and 15,000 put options. This means that if the bears manage to keep the ether price below that price, the neutral-to-bullish call option amounts to 54,500 ETH, which is equivalent to $ 150 million.

Meanwhile, neutral-to-bear put options totaled $ 3,000 and above at 52,700 ETH, an open interest of $ 145 million. This option results in a balanced force upon expiration.

$ 3,000. The bull has little incentive to push the price above

If the bulls decide to show strength by pushing the price above $ 3,000, the difference will turn into 45,700 ETH contracts worth $ 125 million. While this is important, it is probably not enough to make the price higher.

Futures traders have been less than optimistic Following the recent heavy liquidation reported on May 24 by Cointegraph. Regarding options, pressure from calls and puts seems balanced at current levels and should come as no surprise on Friday.

Huobi, OKX, and Deribit will expire on May 28 at 8:00 AM UTC. CME futures and options occur a little later in the day at 3:00 PM UTC.

The views and opinions expressed here are only those of Author And do not necessarily reflect the views of Cointegraf. Every investment and business move involves risk. You should do your research on your own while making the decision.