Ethereum Traders Increase Downside Protection as $6B Options Expire

TLDR

Table of Contents

$6B in ETH options expire Friday, with calls outnumbering puts 2.2 times.
Ether struggles to stay above $3,400 as bearish strategies increase.
Prices under $2,900 favor put options by $580 million in expiry.
Less than 15% of call options are positioned at $3,000 or lower.

Ether faces mounting pressure as $6 billion in options is set to expire on Friday. The cryptocurrency has struggled to stay above $3,400 for over 40 days, with bearish positions increasingly dominating the market. Traders are adjusting their strategies as ETH approaches key support levels, while call options outnumber put options by more than twice, signaling a cautious outlook for year-end price movements.

$6 Billion Options Expiry Looms

More than $6 billion in Etherereum options will expire on Friday, with bullish call options exceeding bearish puts by 2.2 times. Deribit accounts for around 70% of the total open interest, while CME holds 20%. Most of the $4.1 billion in call options are likely to expire worthless since they were concentrated on price targets between $3,500 and $5,000.

Fewer than 15%of call options were positioned at $3,000 or lower. This shows traders were optimistic about ETH reaching higher levels, even though the current market price remains below $3,000.

Bearish Strategies Gain Traction

Demand for bearish options strategies has increased as Ether repeatedly failed to reclaim $3,400 over five weeks. Investors have focused on bear put spreads, bear call spreads, and bear diagonal put spreads. These strategies protect positions against further price declines.

ETH price below $3,200 gives bears an advantage, while the $3,100 level serves as a key threshold for balance between call and put options. Traders see risks for prices under $2,900, where put instruments could dominate by hundreds of millions of dollars.

Price Scenarios for Friday Expiry

Current trends suggest four potential outcomes for the options expiry. Prices between $2,700 and $2,900 favor put options by $580 million, while $2,901 to $3,000 favors puts by $440 million. Levels from $3,101 to $3,200 could balance call and put positions, and prices above $3,201 slightly favor call instruments by $150 million.

A Friday expiry below $2,900 may weaken investor sentiment further. ETH bulls still have a chance to push prices toward $3,100, which could stabilize positions and reduce pressure from bearish instruments.

Market Factors Influence Hedging

Traders also reacted to news from the semiconductor industry. Intel’s failed attempt to manufacture advanced chips in the U.S. affected investor confidence in AI-driven economic growth. Nvidia halted production tests dependent on Intel processes, which contributed to caution in Ether positions.

Options traders increasingly hedged against downside risks amid these developments. Investors are monitoring key levels closely, especially as year-end approaches, to gauge whether bullish or bearish strategies dominate.

Ether’s current trading pattern shows sustained resistance near $3,400 and rising pressure below $3,200. The upcoming options expiry will determine market sentiment and could reinforce trends for the last trading days of the year.