Ether to $4.4K? This Hidden Signal Suggests a Possible Quick Fire Rally
Main Idea
A hidden signal from the derivatives market suggests that ether (ETH) could experience a quick rally to $4,400 due to negative net gamma exposure between $4,000 and $4,400.
Key Points
1. The net gamma exposure of dealers in the Deribit-listed ether options market is negative between $4,000 and $4,400, indicating potential for a quick price rise.
2. With ether crossing above $4,000, the gamma dynamic shifts positive, making $4,400 a likely target for the rally.
3. Dealers may become net buyers of ETH at higher prices, accelerating the rally toward $4,400.
4. Greg Magadini, director of derivatives at Amberdata, noted that $4,400 is the next significant gamma inventory level.
Description
A hidden signal from the derivatives market suggests that ether's (ETH) rally could intensify, lifting valuations quickly to $4,400. The indicator under consideration is the net gamma exposure of dealers/market makers in the Deribit-listed ether options market. Gamma is the critical metric for options traders, measuring how an option's delta, or its sensitivity to the underlying asset's price, changes in response to market moves. When dealers are short gamma, they are forced to buy the underlyin...
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