Home Latest News Ethereum Volatility May Spike Massively Today, Here's Why – U.Today

Ethereum Volatility May Spike Massively Today, Here's Why – U.Today

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.
For the last six days, the average daily volatility for Ethereum was at a relatively low level following the sudden price plunge that happened on Aug. 19. The low volatility period will most likely come to an end after we see an options expiry, which usually correlates with large volatility spikes on the market.
A total of $1.1 billion worth of derivatives is going to expire today, with more than 400,000 calls and 330,000 puts. The max pain price for August 26th options is $1,500, which means the asset has more chances to swing toward the lower price from $1,652.
According to open interest distribution, options traders did not believe in Ethereum’s ability to reach higher levels like $2,000. Despite the prevailing number of calls, many positions have been opened as hedges against the potential spike in volatility.
As for September’s options, investors are mostly “betting” on Ethereum remaining around the price we see on the market today, with the max pain price staying at $1,600, though we can see some investors opening $10,000 ETH contracts. Traders should not be confused by it as someone might use extreme values for hedging their large short positions or for any other unconventional reason.
Despite the unsuccessful attempt to reach the local peak of $2,000 and the following reversal, Ether is still moving in the local uptrend and holding above the 50-day moving average, which as an important condition to be met.

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At press time, the second biggest cryptocurrency is trading around $1,654 and showing a 2.4% price correction in the last 24 hours. The expiry of the aforementioned options will happen today.

Arman Shirinyan is a trader, crypto enthusiast and SMM expert with more than four years of experience.
Arman strongly believes that cryptocurrencies and the blockchain will be of constant use in the future. Currently, he focuses on news, articles with deep analysis of crypto projects and technical analysis of cryptocurrency trading pairs.
Disclaimer: Any financial and market information given on U.Today is written for informational purpose only. Conduct your own research by contacting financial experts before making any investment decisions.

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He is currently Editor at Inferse.com. He is a political columnist for the Finger Lakes Times, Eiram.org, and is the co-founder of InFocus.co. His passions include politics, golf, the media, and gadgets.