Ether Options Signal Points to Potential Rally Toward $4,400
A key derivative market indicator suggests that ether (ETH) could see a swift price rally, potentially climbing to $4,400.
The signal comes from analyzing the net gamma exposure of market makers in the Deribit ether options market. Gamma, a vital metric for options traders, tracks how the sensitivity of an option’s price to its underlying asset changes as market conditions fluctuate.
When dealers hold a short gamma position, they must buy ETH as its price rises and sell as it falls, often intensifying price moves. These dealers facilitate liquidity, profit from the bid-ask spread, and try to keep their overall exposure balanced.
Data from Amberdata reveals a significant concentration of short gamma positions between strike prices of $4,000 and $4,400. As ETH recently passed the $4,000 mark, dealers may increase their purchases to hedge risk, potentially triggering a positive feedback loop that drives the price upward. Around $4,400, the gamma exposure flips positive, encouraging dealers to counter-trade and temper volatility.
This dynamic positions $4,400 as a key target for the current rally.
Greg Magadini, Amberdata’s derivatives director, told CoinDesk, “If ETH momentum pushes beyond $4,000, dealers typically become net buyers at higher prices, which could trigger a fast rally to $4,400 — the next critical gamma level.”
