Ethereum Faces Impending $330M Option Expiry. Will it Be Enough to Reclaim $3,200?

Ethereum experienced a short uptick in the early hours of Thursday, but failed to retest Wednesday’s high.

However, the candle representing the current day has flipped red, indicating that the momentum has waned. The asset is currently trading at $2,966, slightly down.

Nonetheless, looking at price action over the last 48 hours may spark anticipation for further increases in the coming days. For example, on Wednesday, the altcoin dropped to a low of $2,931 but rebounded and printed the first green of the week.

The recovery during the previous intraday session was no coincidence. Investors went through a rollercoaster of sentiment during the world leaders’ meeting in Davos, driven by several remarks from the US president.

He initially appeared aggressive, citing several “facts” that may be offensive to European leaders. In response, traders braced for the worst. However, his tone began shifting when he announced there would be no military intervention in Greenland and stated that a new framework is in place to control the region.

The market surged in response, resulting in the rebound and green close. However, while the event in the Ethereum spot market turned out bullish, the same cannot be said for ETFs. The investment funds tied to the altcoin registered a net outflow of $297 million.

Data from SoSovalue shows that the previous intraday session was not the only day with a negative net inflow for ETFs tied to ETH. On Tuesday, the funds shed over $229 million, which corresponded to the almost 8% decline in spot prices.

In hindsight, ETH’s exchange-traded funds have mostly registered outflows since October. Events over the last fourteen days suggest that the trend may continue.

Macroeconomic Data Tears Another Hole

While price action over the last 48 hours suggests the Ethereum price is improving, recent macroeconomic data points to the opposite. An outlook for the week pointed to Thursday as a day to watch, as the U.S. Bureau of Statistics will release critical data.

The concerned authorities have released data for PCE and initial jobless claims. For the initial jobless claims, analysts predicted it would come in at 208k, up from the previous 199k. However, it came in at 200k, lower than expected but higher than the previous month.

Nonetheless, market watchers predicted PCE for November to come in at 4.3%, the same as the previous month. Instead, it came in higher at 4.4%, while personal income rose and spending remained the same. In conclusion, the core PCE index was the same, but the core PCE (YoY) slightly rose.

In response to these releases, the market retraced. It is important to note that data like PCE are among the metrics used to gauge inflation.  The latest figure, which came higher, suggests that inflation is rising again. Investors panic-sold, causing the recent upward momentum to wane.

Previous price action on Thursday hints at further decline in the coming hours. However, there may be relief on Friday.

Ethereum Gears Up for Option Expiry

Ethereum will have one of its biggest option expiries on Friday. Investors are eagerly awaiting how the price will play out during this event.

Data from Deribit shows the total value of the impending expiration is $338 million. Interestingly, the max pain price sits at $3,200, and the bulls bought more stake in the contract. The total calls are 61,491 as against 52,590 puts.

At face value, the higher calls could send Ethereum above $3,200 on Friday. However, there is no guarantee this will happen. Data from Coinglass explains why this may not be the case.

A look at the Greek tables shows that delta is neutral at $2,600, but becomes negative at $2,800. It reached its max negativity at $2,925. What it means is that at these prices, market makers may hold long ETH or buy more spot, which could cause prices to rise.

However, they will end every bullish action at $2,950, shifting bearish as delta becomes positive. In response, they begin selling spot and shorting the asset at this price. As a result, prices could retrace even lower.

The delta only explains what would happen around $2,950. There is a slim chance that the altcoin will break above the highlighted level. Ethereum must continue upward; reclaiming $3,100 would put the delta back to neutral.

An attempt at $3,200 is almost assured when the delta becomes neutral. However, closing at the maximum pain price is not the bull’s goal. Hence, they may stage further rallies to $3,300 to reel in profit.

In summary, the chance of Ethereum attaining $3,200 on Friday is slim. However, the odds of surging to the pain price increase after reclaiming $3,100. Additionally, options expiry might not be enough to cause such a rise, as fundamentals are currently negative.

Ethereum Holds Steady Above $2,900.

Ethereum dropped to a low of $2,863 on Wednesday but rebounded. At the time of writing, the apex coin has yet to break below $2,900, suggesting growing demand concentration at that level.

Investors may see the latest increase as a bullish setup. However, Friday will confirm whether the latest trend signals further increases or deeper corrections. Previous price movement suggests that if ETH fails to continue above its current barrier, the next target would be $2,720.

Nonetheless, the 1-day chart suggests a slim chance of further increases. The bollinger band is the main reason for this conclusion. Ethereum is trading at the lower band and due for a rebound at the time of writing. If this plays out on Friday, the ascension to $3k may happen.

However, the moving average convergence divergence is still negative following its bearish crossover a few days ago.

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