Ether Rally Could Reach $4,400 Due to Derivatives Market Signal
A signal from the derivatives market indicates that the price of ether (ETH) may rise to $4,400. Key points include:
- The net gamma exposure of dealers in the Deribit ether options market is increasing.
- Gamma measures how an option's delta changes with price movements.
- Short gamma positions mean dealers must buy as prices rise and sell as they fall, amplifying price movements.
- Current data shows a buildup of short gamma between $4,000 and $4,400.
- If ether surpasses $4,000, dealers are likely to buy to hedge, creating a feedback loop that could push prices to $4,400.
- At $4,400, the gamma dynamic shifts positive, requiring dealers to trade against market trends to stabilize volatility.
According to Greg Magadini from Amberdata, strong market momentum could lead to rapid gains toward $4,400 as dealers become net buyers at higher prices.
