Ether (ETH) bulls seem excited by the recent $4,870 all-fourth dimension high that was hit on Nov. 10. While it was a new high in U.S. dollar terms, ETH is all the same 51% below June 2022'southward price in Bitcoin (BTC) terms. But it's entirely possible that the 0.155 BTC level reached in the previous bicycle reflected the overzealous expectations that were rampant during the initial money offering frenzy.

The Ethereum network's success has acquired congestion and loftier fees, bringing the competition closer. For instance, in mid-2017, the leading "competitors" were Ethereum Classic (ETC) and NEM (XEM). Combined, those represented a mere 13% of Ether's $37 billion marketplace capitalization.

Today, the aggregate capitalization of Binance Money (BNB) and Solana's SOL stand at 32% versus Ether'south $557 billion.

At the moment, Ether is trading in an ascending channel with a target at $5,000, but bears apparently withal have reasons to doubt the network's ability to deliver Eth2 by year-stop.

ETH/USD cost on Kraken. Source: TradingView

This year, Ethereum's leading employ instance, decentralized finance (DeFi), has gathered regulators' attention — and not in a proficient fashion. On Nov. 9, United States Securities and Commutation Commission Commissioner Caroline Crenshaw published her opinion in the commodity titled "DeFi risks, regulations and opportunities." In it, she mentions that the sector lacks market protections, and she raises concerns near pseudonymity and marketplace manipulation.

On the other hand, the value locked in the Ethereum network's smart contracts reached a $94 billion all-time high, marker a 42% growth in three months. So, regardless of the competition or the $50 average transaction fee, there's undoubtedly a growing need for its DeFi, nonfungible token (NFT), oracle and decentralized marketplaces.

Ethereum network adapted full value locked in USD. Source: DeBank

What is interesting is fifty-fifty with Ether'due south positive cost activeness, which is backed by strong usage metrics, bearish put (sell) options dominate Friday's $700 million ETH options expiry.

Ether options aggregate open up involvement for Nov. 12. Source: Bybt

At first sight, the $415 one thousand thousand in put (sell) options boss the weekly decease by 31% compared with the $285 million in call (buy) instruments. The 0.69 call-to-put ratio is deceptive because the contempo rally will likely wipe out most surly bets.

For example, if Ether's price remains above $4,700 at 8:00 am UTC on Nov. 12, only $ten 1000000 worth of those put (sell) options will be available at the decease. At that place is no value in a right to sell Ether at $4,700 if it'southward trading above that price.

Bears could still tip the calibration below $four,600

Beneath are the four most likely scenarios that consider the current cost levels. In addition, the information shows how many contracts will be bachelor on Nov. 12 for both bulls (call) and bear (put) instruments.

The imbalance favoring each side represents the theoretical profit:

  • Between $iv,500 and $four,600: 7,500 calls vs. 13,600 puts. The internet outcome favors bear (put) options by $25 million.
  • Between $4,600 and $4,700: 12,700 calls vs. 7,300 puts. The net result is $25 million favoring the call (bull) instruments.
  • Between $4,700 and $4,800: 17,300 calls vs. 2,100 puts. The net result is $75 million favoring the telephone call (bull) instruments.
  • Above $4,800: 24,300 calls vs. 100 puts. The net result is complete dominance, with bulls profiting $115 meg.

This raw guess considers the phone call options beingness used in bullish bets and put options exclusively in neutral-to-bearish trades. Unfortunately, this oversimplification disregards more complex investment strategies.

For instance, a trader could have sold a call pick, effectively gaining a negative exposure to Ether below a specific price. Withal, there'south no piece of cake mode to estimate this effect.

Ether cost may pull back, merely $5,000 remains the target

If Ether's price holds to a higher place $4,800 on Nov. 12, bulls will net a significant $115 meg. In that sense, for ETH bears, taking a $25 million loss should exist considered a victory.

There'southward nonetheless a take chances that bears avoid losses on Nov. 12's expiry by pressuring Ether'southward price below $4,600 on Nov. 12, down a mere 3% from the current $4,750. Would that exist enough to reject the ascending channel initiated three weeks ago? Non really, equally there's room for $4,500 without breaking the support level.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading motility involves risk. You should bear your own enquiry when making a decision.