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Whales Bet on Ethereum To Plunge to $400 This Summer: Report

source-logo  u.today 07 January 2023 20:43, UTC

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

โ€” Wu Blockchain (@WuBlockchain) January 7, 2023

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 โ€” 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

โ€” Cryptoalert ๐Ÿ›ธ (๐Ÿ’™,๐Ÿงก) (@cryptuj_alert) January 7, 2023

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.

u.today