BlockBeats reports that on August 9, Coindesk analyst Omkar Godbole stated that a hidden signal in the derivatives market indicates that Ethereum (ETH) may accelerate its upward momentum, driving its price quickly to $4400.
This key indicator is the net Gamma exposure of market makers in the Deribit Ethereum options market. Gamma is an important metric for options traders, measuring how the options Delta (i.e., its sensitivity to changes in the underlying asset's price) changes with market fluctuations.
When market makers are in a negative Gamma state, they are forced to buy the underlying asset when prices rise and sell when prices fall, which typically amplifies one-sided market fluctuations. Market makers provide liquidity to the order book, profiting from the bid-ask spread while striving to maintain a price-neutral net exposure.
According to information from data provider Amberdata, there has been a significant accumulation of negative Gamma in the $4000 to $4400 strike price range. As Ethereum breaks through $4000, market makers may buy Ethereum for hedging, creating a self-reinforcing positive feedback loop that drives prices quickly up to $4400. This price level will turn the Gamma dynamics positive, forcing market makers to take reverse actions to curb price volatility.
Amberdata Derivatives Director Greg Magadini stated: "If market momentum is strong enough to break through $4000, we will see market makers become net buyers of Ethereum at higher price levels, potentially causing prices to quickly rise to $4400, which is the next important Gamma inventory level." This makes $4400 a reasonable target for the current upward trend.
