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Ethereum Prices Surge Ahead of Friday's $930M Option Expiry: Bulls $115 Million Lead

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Ethereum Prices Surge Ahead of Friday's $930M Option Expiry: Bulls $115 Million Lead

In the last few weeks of April 2021, Ethereum (ETH) has been on its ease, with prices oscillating to as high as $2,650. However, the rise did not come easy as on April 17. The price plunged by 20% that translates to $1 billion liquidations on long-term futures contracts.

When looking at the chart above, there is at least a 28% gain for the last few days. The revenue accelerated interest on ETH futures, reaching at least $8.2 billion. That accounts for only 5% below April 15 record.

Option marketstook a similar event where they gained by 45% since March 25 expiry. A statement released by Daniel H. Schulman, who is the president and CEO of Paypal, stated, "demand for cryptocurrencies has been multiple-fold higher than what the majority expected."

Paypal's CEO statement attributed to ETH price recovery. Besides, the net value of locked ETH smart contracts like Maker, Uniswap, and Compound toping high to at least $54.19 billion.

Currently, $4.2 billion of ETH options represent an all-time high, and at least $930 million are set to expire Friday 30 this month. As has always been the case, 90% of the market share in options to expire on April 30 belong to Deribit exchange reigns supreme.

Options are in the form of two segments. Among them is the call option, commonly known as a buy. They involve buyers acquiring Ethereum at a fixed price on their expiry date. Investors use the call option when dealing with bullish strategies or neutral arbitrage trades.

A put option is another segment, commonly known as (sell), and is known to be the most appropriate for protecting gains from negative price swings. Below is a chart that will help you understand competing forces and how they are balanced. You can compare the calls and put options sizes at every expiry strike.

Ahead of April 30, a weird pattern appeared as bears were caught up in an ambush with 91% of put options open interest at $2,400 and below. Meanwhile, the bulls were optimistic, with almost half of call options at $2,880 and above.

Bulls Decent $115 Million Lead

Bulls have a decent lead of $115 million on open interest, and any expiry above $2,240 will highly favor the bulls. A difference in preferring the call option may double at $2,880, but that doesn't justify the 10% surge in ETH price.

Meanwhile, the bears will be counting losses of about 17%. The dropping price below $2,240 is more than enough for the bears to eliminate call options giving them an added advantage. April 30 comes with no surprise on ETH prices. That will force most of the investors to move and look forward to June's options.

What Next Direction for Ethereum?

When checking at the daily charts, initial support is created below moving averages at $2,200. It is expected that the sell-off might increase to $2,000 level as per the next focus. Once the focused support drops, a downward momentum might take a course of beginning to snowball. Downside move might target supports at either $1900, $1800, or $1700.

Meanwhile, the bulls must maintain above giving the moving averages before getting to potential resistance levels. That will promote investors' decision on considering a sustained move for an extended recovery to resistance levels of either $2600, $2700, or $2800. Besides, RSI (14) moved above 50 levels, which may give more bullish signals and can only be possible if the 9day MA exists above 21-day MA.