Will Ethereum rise to $4,400? This hidden signal suggests a rapid rebound may occur.
A hidden signal from the derivatives market indicates that the rebound of Ethereum (ETH) could intensify, quickly raising its valuation to $4,400.
The indicator in question is the net gamma exposure of traders/market makers in the Ethereum options market listed on Deribit. Gamma is a key metric for options traders, measuring how the delta of an option, or its sensitivity to the price of the underlying asset, changes with market volatility.
When traders are in a short gamma position, they are forced to buy when the underlying asset's price rises and sell when the price falls, which often amplifies directional volatility. Traders provide liquidity to the order book and profit from the bid-ask spread while continuously working to maintain a price-neutral net exposure.
According to data source Amberdata, significant accumulation of short gamma has been noted between strike prices of $4,000 and $4,400. When Ethereum breaks above $4,000, traders may buy the asset to hedge their exposure, creating a self-reinforcing positive feedback loop that quickly drives the price up to $4,400. This is a level where gamma dynamics shift to positive, requiring traders to trade against the trend to curb price volatility.
This makes $4,400 a reasonable price attraction point for the current rebound.
“If the market momentum is strong enough to break through $4,000, we would see traders becoming net buyers of ETH at higher prices, which could lead to a rapid rebound to $4,400, the next important gamma inventory level,” said Greg Magadini, Director of Derivatives at Amberdata, to CoinDesk.
The team still has positions and will never let fans blow up the ship! Hurry aboard!
Stay tuned: BCH MYX ILV BNB ETH ENA
