Ether (ETH) bulls are probably very pleased with the 368% gains accrued so far in 2022, and it seems like non a day passes where the altcoin doesn't hit a new all-fourth dimension high.

Even with Ether on the path to $v,000, there are yet enough of concerns virtually the network's capability to blot the strong demand coming from the decentralized finance (DeFi) and nonfungible token (NFT) sector.

Another potential setback lying ahead is the United States Treasury study on stablecoin regulation released on November ane. The report stressed the necessity of Congress to "ensure appropriate federal prudential oversight on a consistent and comprehensive basis."

In improver to this, competing networks offering interoperability with major DeFi projects have been gaining adoption, both in total value locked (TVL) and market share on smart contracts. As an instance, this week, Solana (SOL) rallied to a new $236 tape high, surpassing Cardano (ADA) to become the fourth-largest cryptocurrency.

According to information from CryptoSlam, secondary sales of Solana's NFT markets reached $495 meg over the past three months, but despite this, the Ethereum blockchain remains the nigh popular, with NFT secondary sales topping $i.76 billion in October.

ETH price on Coinbase in USD. Source: TradingView

By managing to stay ahead of the competition and creating a path to solve the scalability problem by migrating to a proof-of-stake network, Ethereum has lured some heavy investors. This includes Dallas Mavericks owner Marker Cuban, the Houston Firefighters' Relief and Retirement Fund, and billionaire Barry Sternlicht.

The Nov. five $540-meg Ether options expiry may announced to be an uncontested victory for bulls, but this wasn't the case a couple of weeks agone.

Ether options aggregate open interest for November. 5. Source: Bybt

At commencement sight, the $300-billion put (sell) options dominate the weekly expiry by xx% compared to the $240million calls (buy) instruments. All the same, the 0.80 call-to-put ratio is deceptive considering the recent rally will likely wipe out most bearish bets.

For instance, if Ether's price remains to a higher place $4,500 at 8:00 am UTC on Nov. 5, just $one.5 million worth of those put (sell) options will exist available at the expiry. At that place is no value in a right to sell Ether at $4,500 if it's trading higher up that cost.

Bulls are comfortable in a higher place $4,500

Below are the four likeliest scenarios for the $540-million Nov. 5 expiry. The imbalance favoring each side represents the theoretical turn a profit. In other words, depending on the expiry price, the quantity of telephone call (buy) and put (sell) contracts becoming active varies:

  • Between $4,300 and $iv,400: six,870 calls vs. vi,000 puts. The net upshot is counterbalanced betwixt bulls and bears.
  • Between $4,400 and $4,600: 13,750 calls vs. 350 puts. The net result is $threescore million favoring the phone call (bull) instruments.
  • Between $iv,600 and $4,700: 18,500 calls vs. 50 puts. The net result is $85 meg favoring the telephone call (bull) instruments.
  • Above $4,700: 22,800 calls vs. 0 puts. The cyberspace result is complete dominance, with bulls profiting $107 1000000.

This crude judge considers call options beingness used in bullish bets and put options exclusively in neutral-to-bearish trades. Still, this oversimplification disregards more complex investment strategies.

For case, a trader could take sold a put selection, finer gaining a positive exposure to Bitcoin (BTC) to a higher place a specific price. But, unfortunately, there's no easy way to estimate this effect.

Bears demand a 6% toll correction to reduce their loss

The only way for bears to avoid losses on Friday's decease is by pressuring Ether'south price below $four,400 on Nov. 5, downwards six% from the current $iv,660. And then, unless there is some apropos news or events announced before the weekly options deadline, bulls are likely to profit $85 meg or higher.

Traders likewise have to factor in that during balderdash runs, the amount of effort a seller needs to impact the cost is immense and usually ineffective. Currently, options markets data betoken to a considerable advantage from call (buy) options, fueling bullish bets for Ether, and this increases expectations of a rally to $five,000.

The views and opinions expressed here are solely those of the author and do non necessarily reflect the views of Cointelegraph. Every investment and trading move involves chance. You should deport your own research when making a decision.