Analyst: Options Market Data Shows ETH Has Potential to Rise to $4400
BlockBeats News, August 9th, Coindesk analyst Omkar Godbole stated that a hidden signal in the derivatives market indicates that Ethereum (ETH) may experience an intensified uptrend, driving its price quickly to $4400.
This key indicator is the net Gamma exposure of market makers in the Deribit Ethereum options market. Gamma is a crucial metric for options traders, measuring how the options' Delta (i.e., their sensitivity to the underlying asset's price changes) varies with market fluctuations.
When market makers are in a negative Gamma state, they are forced to buy the underlying asset on price increases and sell on price decreases, which usually amplifies market one-sided movements. Market makers provide liquidity to the order book, profit from the bid-ask spread, and strive to maintain a price-neutral net exposure.
According to data provider Amberdata, a significant negative Gamma accumulation has been observed in the $4000 to $4400 strike price range. As Ethereum breaks above $4000, market makers may buy Ethereum for hedging, thereby forming a self-reinforcing positive feedback loop that drives the price rapidly to $4400. At this price level, the Gamma dynamic will turn positive, forcing market makers to take reverse actions to suppress price volatility.
Greg Magadini, Derivatives Director at Amberdata, stated: "If the market momentum is strong enough to break through $4000, we will see market makers becoming net buyers of Ethereum at higher levels as well, potentially causing a rapid price increase to $4400, which is the next significant Gamma inventory level." This makes $4400 a reasonable target for the current uptrend.
You may also like
Gainers
Latest Crypto News
The HyperLiquid team unbonded 2.6 million HYPE tokens, with 609,000 tokens being sent to an OTC platform.
Trump: Stocks and 401k Plans Have Reached All-Time Highs, While Inflation, Prices, and Taxes Are All Decreasing
If Ethereum breaks above $3100, the mainstream CEX cumulative short liquidation pressure will reach $9.05 billion.
Data Center Overheating Causes Nasdaq to Halt Trading for Over 10 Hours, Backup Data Center Not Deployed
Alliance DAO Genesis: Does not believe that L1 tokens are always a bad investment, nor will it short them
Customer Support:@weikecs
Business Cooperation:@weikecs
Quant Trading & MM:bd@weex.com
VIP Services:support@weex.com