The price of the second largest crypto on the market, Ethereum, has struggled hard to break above $ 2,000. However, the expiration of Ethereum options suggests that the battle is not over and it will not be easy.
$ 2,000 will be a tough level for Ethereum (ETH)
According to CoinTelegraph contributor Marcel Pechman, the next expiration of Ethereum options contracts will happen on March 26. Why is this important? Well, because there are more than 96,000 ETH purchase option contracts with open interest between $ 2,240 and $ 3,520, according to Pechman.
Remember that option contracts are a financial instrument that gives traders the right, but not the obligation, to buy an asset at a specific price at some point in the future.
Consequently, Ethereum options contracts represent an instrument through which crypto users can speculate on the future price of the crypto.
Keep in mind that option contracts can be traded until they expire. Therefore, as the expiration date approaches, the contract has more or less value depending on whether or not it looks like they are going to hit the price of the crypto or not.
Very high expectations
In this sense, there are 96,000 Ethereum options contracts that are about to expire and have an open interest between $ 2,240 and $ 3,520. This means that, so that these contracts do not lose their value, the price of Ethereum should increase between 25.8% and 97.7%. Currently the price of ETH is USD 1,780.
Without a doubt, as Pechman explains, there seems to be a bullish sentiment in the Ethereum crypto market that seems not to materialize and is not widespread according to the indicators. Therefore, as the expiration date approaches, the options will lose value.
The reason? Well, crypto investors will see precisely this and think that it might make sense to close their position and lock in profits.
Meanwhile, Ethereum will be facing a number of challenges over the next month. As we previously reported in CryptoTrend, the crypto will undergo an update called “Berlin”, which will run on the mainnet on April 14 or so, but which is already being tested on the testnet.
Where do you think the price of Ethereum is headed? Could it hit a new all-time high? Let us know in the comment box.