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.
Chinese crypto journalist and blogger Colin Wu has tweeted that some crypto whales are believed to have bet on Ethereum to plunge to the $400 level via put options.
Wu cited @Blofin_Official, the account that shared the crypto analytics data. According to their tweet, an order has been placed of 26,000 Ethereum put options. The strike price for it was set at $400, the options will expire June 30 this year.
The strike price of a put option implies that when the option expires, a trader can sell the underlying asset at this price level even if it goes lower.
Recently, there has been a large order of 26,000 ETH put options with a strike price of $400 and an expiration date of Jun 30. Some traders believe this is the tail management behavior of crypto whales. According to @Blofin_Official pic.twitter.com/VmYC44939h
Thus, some whales are likely to bet on the second largest cryptocurrency to drop to the $400 level, which was last seen in late 2020. However, Wu added that this could also be tail management behavior as whales are buying large amounts of put options to protect their positions.
A user in the comment thread assumed that the whales might be expecting the ETH price to plummet that much once the Ethereum locked in the ETH 2.0 deposit contract is allowed for withdrawals after the Shanghai upgrade. This upgrade is scheduled for the first quarter of this year — half a year after the Merge took place in mid-September.
I think they believe strong selling pressure after unlock ETH from ETH 2.0
As the Merge was implemented, Ethereum switched to the proof-of-stake consensus protocol from the proof-of-work one, thus becoming more energy saving compared to Bitcoin, LTC, DOGE and other first generation cryptos that are mined via PoW.
At press time, Ethereum is changing hands at $1,263, having shown a small rise of 1.53% in the last 24 hours, according to CoinMarketCap data.
Yuri is a crypto journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future in many of its aspects. ‘Hodls’ major cryptocurrencies and has written for multiple crypto media outlets.
His articles have been quoted by such crypto influencers as Tyler Winklevoss, John McAfee, CZ Binance, Max Keiser, etc.
Currently Yuri is a news writer at U.Today and can be contacted at yuri.molchan@u.today.
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.
