Ethereum options expiration shows risks below $2,900

Ether (ETH) has not been able to sustain prices above $3,400 for the past 40 days, raising concerns among traders that the bear may remain for a long time.

Main Receptors:

$6B in Ether options expires Friday, 2.2 times more than put (sell) instruments in call (buy) bets.

Unless the ETH price breaks $3,100, the bears will hold the advantage.

Bulls expected a year-end price of $4,000 or more before November's 28% crash, so $6 billion in ETH options ending Friday could add further pressure.

The price of Ether at 8:00 am UTC on Friday will determine if the bears are in control, even though the call options are 2.2 times higher.

Deribit accounts for 70% of total open interest, followed by Chicago-based CME at 20%. However, most of the $4.1 billion worth of call options is set to expire on Friday, as traders place silver bets on ether prices between $3,500 and $5,000 by the end of the year.

Less than 15% of total call options are settled at $3,000 or less.

Related: Trend Research Quietly Becomes One of Ethereum's Biggest Whales With 46K ETH Purchase

Excluding overly optimistic calls at $5,000 and above, the data shows that less than 25% of these instruments are priced below $3,200, which can cost buyers some money.

Traders often sell covered calls at $8,000 and year-end strikes at $10,000.

While bulls are overconfident that Ether will return $3,400 a year, bearish strategies may be too far away, stacking bets between $2,200 and $2,900.

If Ether trades above $2,950 on Friday, more than 60% of the $1.9 billion in total options will be worthless. Even so, losing positions are best placed as long as ETH stays below $3,200.

Investors reacted to reports Thursday that Intel's efforts to challenge global leader Taiwan Semiconductor ( TSMC US ) to make advanced chips in the U.S. have failed.

According to a Bloomberg report, NVDA (NVDA US) has stopped production tests based on Intel's manufacturing processes.

ETH options traders face higher risk

As traders priced in weak prospects for the economic impact of artificial intelligence in the US, many moved to hedge their ETH positions.

Demand for bearish ETH options has increased, especially after several failed attempts to retake the $3,400 level over the past five weeks, including “Bear Diagonal Puts”, “Bear Put Spreads” and “Bear Call Spreads”.

$3,100 is key for ether bulls.

Below are four possible scenarios where year-end ETH cumulative options will expire based on current price trends.

$2,700 to $2,900: The net result supports $580 million in stored equipment.

$2,901 to $3,000: The net result supports $440 million in equipment that has been deposited.

$3,101 to $3,200: A balance between calls and options.

$3,201 to $3,300: The net result supports call instruments by $150 million.

A close below $2,900 on Friday could dampen Ether investor sentiment further. However, ether bulls still have a chance to push the price towards $3,100 on Friday.

This article is not intended for general information purposes and should not be construed as legal, tax, investment, financial or other advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph. While we strive to provide accurate and up-to-date information, Cointelegraph does not guarantee the accuracy, completeness or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph shall not be liable for any loss or damage arising from reliance on this information.