Ether (ETH) is struggling to stay above the $2,600 resistance level after posting a 15% gain from September 18 to 23. Recent macroeconomic data showing a weakening U.S. economy has triggered a rally in the stock market, leading to a surge in demand for short-term government bonds. Against this backdrop, traders are betting that the $2.78 billion Ether options expiry on September 27 could further solidify the current bullish momentum.
Reasons for ETH Price Growth
The main driver behind ETHâs rally was the US Federal Reserveâs interest rate cut, signaling a shift toward more accommodative monetary policy. This pushed the S&P 500 to a record high on September 24. In addition, the S&P Global Manufacturing PMI fell on September 23, further raising concerns about the health of the economy.
The yield on the 2-year US Treasury note fell to a 24-month low as investors turned to government-backed assets as a hedge against risk. Fears of a looming recession have benefited digital assets such as Ether, which are considered scarce assets.
However, in the long term, ETH prices have fallen 33% over the past four months. The decline was triggered by the highly anticipated launch of an ETH spot ETF in the US, which disappointed, resulting in $684 million in outflows, according to data from Farside Investors.
The $2.77 billion worth of Ether options outstanding currently consists of $1.82 billion of calls and $0.95 billion of puts. While bulls appear to have the upper hand with $1.47 billion of calls targeting prices at or above $2,700, these positions will become worthless if Ether fails to break above this level by September 27. So, despite fewer puts, bears still have a chance to turn the tables.
As the price of Ether has risen, so has the demand for the Ethereum network's smart contract processing capacity. The number of transactions on the Ethereum network increased by 15% in the seven days leading up to September 24, pushing average transaction fees to more than $4.50, up from $1.45 just ten days earlier.
Additionally, the issuance of additional Ether has added pressure on the asset in an attempt to recover to the $3,000 price level. According to data from Ultrasound Money, an additional 58,856.4 ETH have been issued in the past 30 days, representing an annual inflation rate of 0.6%. These factors have raised concerns among investors that Ether's growth potential may be limited, especially amid competition from platforms such as Solana and Sui Network, both of which have transaction costs up to 20 times lower than Ether.
Bears dominate $2.8 billion options expiry
Against this backdrop, traders believe that bulls need to win at the upcoming options expiry to push the price back to $3,000.
Below are the four most likely scenarios based on the current Ether price trend, along with the impact of calls and puts on the September 27 expiration. These estimates assume that puts reflect bearish positions, while calls are consistent with neutral to bullish strategies. However, it should be noted that this is a simplification and does not account for more complex investment strategies.
From $2,400 to $2,500: Put options have a $225 million advantage.
From $2,500 to $2,600: Put option has $100 million advantage.
From $2,600 to $2,700: Call options begin to dominate, with an advantage of about $70 million.
$2,700 to $2,800: This scenario favors the call option, with a net advantage of $220 million.
Overall, the best chance for Ether bulls to make a significant advance is to push the price above $2,700 by September 27. However, the path for a $100 million put option advantage seems clearer, as the current $2,600 support level remains under pressure.
