The Ethereum Merge is almost here, and noshitcoins says the outcome of the event will impact whether bulls or bears benefit from this week’s $490 million ETH options expiry.
Given the current state of the wider crypto market, some traders might be surprised to learn that Ether has been trading in an ascending trend for the past 17 days. While the entire cryptocurrency market experienced a 10% decline on Sept. 13, Ether's price held firm near the $1,570 support level.In less than 12 hours, the Ethereum network is scheduled to undergo its largest ever upgrade and the possibility of extreme volatility should not be ignored.
During an upgrade, there is always the risk of multiple malfunctions, especially in more complex systems like the Ethereum Virtual Machine processing. Even if the upgrade has been relatively smooth on previous testnet versions, it is impossible to predict the outcome of the decentralized applications and second-layer solutions plugged into Ethereum’s ecosystem.
That is precisely why the $490 million Ether options expiry on Aug. 16 will put a lot of price pressure on both sides, even though bulls seem slightly better positioned as Ether nears $1,600.Ether's failure to break the $2,000 resistance on Aug. 14 and its subsequent plunge to $1,420 on Aug. 29 gave the bears the signal to expect continuation of the downtrend. That becomes evident as only 12% of the put options for Sept. 16 have been placed above $1,600.
If Ether price remains below $1,600 at 8:00 am UTC on Sept. 16, only $27 million worth of these call options will be available. This difference happens because there is no use in the right to buy Ether at $1,600 or $1,700 if it trades below that level on expiry.Below are the four most likely scenarios based on the current price action. The number of options contracts available on Sept. 16 for call and put instruments varies, depending on the expiry price.
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