Hidden signals from derivatives markets indicate Ether’s signal (ETH) Rally can intensify, quickly increasing the valuation to $4,400.
The indicator considered is the net gamma exposure of dealers/market makers in the deribit-listed ether options market. Gamma is a key indicator for options traders, measuring how the delta of options or sensitivity to the price of basic assets responds to market transfers.
When dealers briefly gamma, they are forced to buy underlying assets because their prices rise and sell as prices fall, which usually magnifies directional action. Dealers provide liquidity to the order book and make money from the bid spread while continually working to maintain net risk of adverse prices.
According to data source Amberdata, the strike between $4,000 and $4,400 accounted for the famous gamma as of press time. With Ether crossing over $4,000, dealers can purchase assets to hedge their exposure, creating a self-enhanced positive feedback loop that could quickly raise the price to $4,400. This is a dynamic shift in the positive level of gamma, requiring dealers to trade the market and prevent price fluctuations.
This makes $4,400 the logical price magnet for ongoing gatherings.
“If the momentum in the market is enough to get $4,000, we’ll see dealers also become net buyers of ETH at higher prices, which could lead to the next Big Gama inventory level, which could lead to a rapid reach of $4,400,” Amberdata derivatives director Greg Magadini told Coindesk.
