It’s time for another options expiration, and the Ethereum market this time too is divided. Given the chaotic state of the wider market, traders on both sides of the spectrum have their own reasons for being biased at this point.
Chase for an uptrend continues?
Even though short term corrections do not instigate fundamental changes, it is important to stay abreast of the prevailing market sentiment to know what to anticipate going forward.
Now, as per data from Skew, over 164.1k Ethereum contracts are set to expire in two batches – 155.8k on 10 December [today] and the remaining 8.3k on 11 December [tomorrow].
Now when the chart below is carefully observed, the number of buy and sell contracts is fairly even for both days. This means that the standoff between bullish and bearish traders would be neck and neck.
Skew’s OI by strike price chart clearly outlines that the number of call contracts have an upper hand in the strike price bands above $4k, while the puts dominate the lower price bands.
However, despite the bigger picture, it should be noted that the bearish sensitivity has picked up more speed today. At the time of writing, nearly 3,337 DBT sell contracts have been purchased with Ethereum reaching $ 3.5,000. Another 1907 additional contracts were also purchased around the strike price of $ 4,000.
Having said that, it should be noted that the market isn’t completely devoid of bullish traders. 1939 and 1651 DBT call contracts have also contributed to today’s options volumes. The strike prices for these contracts stand at $4300 and $4500 respectively.
Looking at the aforementioned datasets, it sort of becomes clear that the majority of novel traders who’ve entered into the market are pessimistic about Ethereum’s price.
The do or die situation
The price of the asset is indeed at an undecided stage at this point. As can be seen from the snapshot below, ETH has only properly dipped below $ 4,000 on two instances so far in December. One on December 4, when the whole market collapsed, then two days later, on the 6th. Apart from these two cases, it was generally able to stay above the aforementioned threshold.
At the time of this analysis, ETH was seen recovering from its daily low of $4021. In fact, the previous candle and the candle in the making were in green at the time of this analysis, highlighting the alt’s desperate effort to stay above $4k.
So if this continues, the chances of a downtrend for the foreseeable future will gradually fade. Nonetheless, if he doesn’t hang on to $ 4,000, then things could escalate. More so, as traders would be incentivized to exercise their ETH put option, which in turn would trigger a sell bias.
