In recent days, selling pressure has dominated the cryptocurrency market, with sharp declines in Bitcoin and altcoins. Bitcoin has fallen below $73,000, while Ethereum, the largest altcoin, is hovering just above $2,000 and struggling to maintain that level.
As ETH’s week-long loss exceeded 15%, Coinbase Markets issued a critical assessment of Ethereum.
Big Risk in Ethereum: $1,980 Could Be a Critical Threshold!
Coinbase Markets, which analyzes options market data for ETH, stated in its X post that it has a $589 million short gamma position around $1,980.
Coinbase Markets analysts noted that the $1,980 level in the ETH options market stands out as a critical zone in terms of increasing price volatility, and according to Deribit data, there are approximately $589 million worth of short positions at this level.
It is stated that this positioning could accelerate Ethereum’s price movements, either upward or downward.
This is because market makers holding short gamma positions in the options market may need to trade in parallel with price movements to balance their risks. According to Coinbase, this can lead to increased selling when Ethereum’s price falls and increased buying when it rises.
Coinbase added that if ETH retests the $1,980 level, the current support level could weaken and price volatility could increase.
Coinbase also notes a concentration of negative gamma at the $2,000 level and high open put options. This area, known as a put wall, forms a significant price threshold in the options market. The concentration in the $1,980-$2,000 range is considered to potentially increase downward pressure on Ethereum.
*This is not investment advice.
