0
0
Ethereum ended Wednesday with no significant price change, as it continues to grapple with low trading volume amid the holidays.
The latest trend is unsurprising, as an outlook noted that the low volatility across the market is no new occurrence during periods like this, as investors take time off the mark to enjoy the holidays.
Nonetheless, the bears are still maintaining their presence this week. Following Mondayās slight increase, the asset continued to decline amid increased selling pressure. A close at the current price would mark its third consecutive day of declines.
Amid the current trend, asset risks plunge even further as the option expiry nears. It is worth noting that a contract expired earlier on Thursday. Although not massive compared to the impending, it ended around the max pain level around $2,950. With many contracts rendered worthless by this, the price reaction has been negative.
The āSanta Rallyā everyone anticipated never came, and even worse, prices are declining. Reacting to the slight downtrend across the market, some investors have adopted the āMerry Dipmasā greeting. Others expressed surprise over how prices played out over the last two months, leading to current values.
Reflecting on current price action, others are comparing it with price action from a few years ago. Bong presented an image that showed several top assets down by an average of 40%. It depicted what happened on Dec 25, seven years ago, and earned a laughing emoji from CZ BNB.
While some investors are making light of recent price actions, options data suggests that the worst is yet to come for Ethereum.
Ethereum is gearing up for another significant event shortly after Christmas. The biggest options expiry for December will take place on the 26th. Current data shows open interest at 1,278,706, with calls accounting for over 70%.
While puts are clearly outnumbered in the OI figures, the current contract is worth $3.74 billion, and the current-day data show the bears pulling back, accounting for almost 45% of the current-day option volume.
Additionally, the max pain point for the contract is $3k. Usually, prices may pull closer to the pain price as market makers will look to void most of the contract. Prices played out this way earlier and may repeat in the coming hours. The sheer number of current calls means investors will also look to maximize profits by forcing a close above the pain level.
However, delta is currently negative, indicating that the market makers are shorting the asset at $2,900. If prices rise to $3,000, the action may change, as the delta is positive. This means that $3k is a critical level for Ethereum.
Nonetheless, closing at the max pain level does not guarantee massive profit for the call buyer; they must push the price higher. The apex altcoin could continue upward after reclaiming $3k. The bulls may target $3,200 in their bid to maximize profit.
The trading action after options expiration remains unclear. Nonetheless, the bears may step in to take profits. Option traders are banking on this as Ethereum gears up for another contract termination on the 27th. However, itās significantly smaller, worth only $17 million. 5,763 interests are currently open, and the put account for 3,000.
The maximum pain level for this contract is $2,950, suggesting ETH may retrace to that level as the expiration nears.
Indicators on the 1-day chart are currently neutral. As a result, it is hard to gauge the next price action based on them. For example, theĀ moving average convergenceĀ divergence depicts the 12 and 26 EMAs trending closely.
The pattern started on Monday as the metric edged closer to clocking a bullish crossover. However, the apex altcoin lost momentum, and subsequent declines followed. In the absence of volatility, the MACD has yet to print any strong signals.
Nonetheless, the bollinger bands indicate that the bears are still in control as the asset trades below the middle band. A closer look at the indicator suggests that ETH is due for further uptrends. It tested the lower bands last week and rebounded.
Previous price movement shows that after such a rebound, the asset would surge above the middle band, toward the upper line. That is yet to happen, but the impending option expiry may see the asset attain the mark.
As earlier stated, the higher calls on the impending options contract may trigger further price declines. However, the significant selling may follow, sending prices lower. The max pain level for the Dec 27 expiration is $2,950. At this point, most of the contract will be null. Further downtrends will put the put buyers in profit.
The bears may stage a selloff to send ETH below $2,900. The 1-day chart shows that ETH briefly broke the $2,900 barrier several times in the last seven days. Ethereum may slip further, edging closer to the $2,800 support. A flip may happen, but a rebound may follow shortly after.
The liquidation heatmap shows that the asset testing of the $2,800 will result in liquidations exceeding $200 million. Over the last week, more traders have opened longs, with liquidations at $2,880. The bulls will look to defend this key level as the bears attempt to push further into decline.
A strong showdown may unfold at the barrier,but the liquidation cluster at the mark gives Ethereum extra protection.
Nonetheless, the apex altcoin could drag other assets in its ecosystem. One such is Ethereum Classic. A side-by-side price placement shows that ETC is mirroring ETHās action.
Currently trading at $11.8, a further uptrend could see it retest bollingerās middle band around $12.5. However, it risks losing the $11 support in the event of a massive pullback.
The post Ethereum $2,800 Support Could Buckles as it Faces Intense Pressure From Option Expiry appeared first on CoinTab News.
0
0
Manage all your crypto, NFT and DeFi from one placeSecurely connect the portfolio youāre using to start.
0
0
0
0
0
0
0
0
