Ether put options are clustering at $2,200, suggesting either a hedge or a short-term bearish outlook for the digital asset, an analyst said.
Ether options open interest ahead of Friday's end-of-month expiry shows a concentration of puts at a strike price of $2,200. While one analyst said this could be a hedge of a bullish position, it could also indicate a bearish short-term outlook in the second largest digital asset by market capitalization.
Options are derivative contracts that give a trader the right but not the obligation to buy or sell the underlying asset at a predetermined price on or before a specific date. A call option gives the right to buy, and a put offers the right to sell. It is assumed that a trader who buys put options is implicitly bearish on the market, while a call buyer is bullish.According to Bitfinex Head of Derivatives Jag Kooner, the build-up of puts at $2,200 could likely be part of a hedging strategy.
Ether options open interest ahead of Friday's end-of-month expiry shows a cluster of calls at $2,400. Image: Deribit.The concentration of put options at the $2,200 strike price implies that certain market participants harbor a specific interest or expectation that the price of ether could drop below this level by the options expiration date.In the past 24 hours the price of ether broke through the $3,000 mark, before posting a sharp pull-back to trade at $2,917 at 1:35 p.m.
In the the perpetual futures markets, fluctuating price action in the past 24 hours has caused a spike in liquidations of ether positions, totaling over $47 million, according to Coinglass data.
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