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Did ETH traders lower their price to make a profit when the options expired? Don’t seem – Explica .co

Buy in the medium term on dips and gains, a strategy used in most sectors of the economy. Such is the driving that will fall to occur. In this case, we have some data showing how those who bought ETH in a drop below $ 1,600 are winning at the moment, but also not necessarily driving. The profits persisted despite the ETH options expiring yesterday.

The price of the ETH fell significantly on March 24th, but recovered again. It went from $ 1,550 to $ 1,800. However, we are also aware that when the Ethereum options expire, there can always be a price decline. On this occasion, the whales and traders who bought ETH in the fall have reduced their positions in the last few hours and even made profits with it. The move continued even after the options expired.

What factors could have caused traders to close their long-term ETH contracts after the options expire?

The $ 1.15 billion worth of Ethereum options expired yesterday, but the ETH price was relatively stable at $ 1,630 when it expired. This event could have been influenced by the continued rise in gas prices for Ethereum transactions.

However, to better understand these events it is necessary to find clues or evidence that the main traders are reversing previous price pressures. If not, there should be no reason to believe that the recent liquidation was related to the expiration of the options.

In short, it seems that after the options expired, traders did not change their stance. The major exchanges show the net positioning of the long-to-short contractual relationship. This indicator is calculated by analyzing the client’s consolidated position in spot, perpetual and futures contracts. Hence, it offers a clearer view of whether professional traders are trending higher or lower.

In these cases it is always important to emphasize that there are occasional methodological discrepancies between these platforms. Therefore it is recommended to monitor the changes and not the absolute numbers. The rate of 1.56, which favored longs on OKEx, was the highest level in March. This suggests that major traders were confident that the $ 1,550 support will be maintained.. Since this step was done 36 hours before the options expired, the thesis that the whales lowered the price of ETH in order to make a profit is weakened.

Additional Comments

The option-induced price reduction theory is refuted in a CoinMetrics report. That report concluded that the EIP-1559 network upgrade is unlikely to solve the high gas cost problem. The report mentions that only scalability solutions can really fix the problem. Hence, large traders would have bigger issues to worry about and would depress the price of Ether regardless of the expiration date.

According to CoinTelegraph, “There was a similar trend in Huobi, where the net long-short ratio of major traders peaked at 0.96 on March 25th.” This slightly favored the short positions, but the indicator has had since then March 7th no more such values ​​seen. Hence, “it is stated that no selling pressure indicated the expiration of the options on March 26th”.

In this case, we need to take into account that there can only be a sustained rally towards all-time highs if the changes mentioned by CoinMetrics in their study are implemented. Yes, scalability. The future of the ETH price is closely related to the progress of the Eth2 update, and we do not deny that it depends on the activity of traders as well. This time, however, the fall was not intentionally driven.

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