Coindesk analyst Omkar Godbole said a hidden signal in the derivatives market suggests that Ethereum's (ETH) rally could intensify, driving its price to $4,400 rapidly.
This key metric is the net Gamma exposure of market makers in the Deribit Ethereum options market. Gamma is an important metric for options traders, measuring how an option's Delta, or its sensitivity to price changes in the underlying asset, changes with market volatility.
When market makers are in a negative Gamma state, they are forced to buy underlying assets when prices rise and sell when prices fall, which often amplifies one-sided market movements. Market makers provide liquidity to order books, profiting from bid-ask spreads while striving to maintain price-neutral net exposure.
According to data provider Amberdata, there is a clear negative gamma build-up in the $4,000 to $4,400 call-over price range. As Ethereum breaks through $4,000, market makers may buy Ethereum as a hedge, creating a self-reinforcing positive feedback loop that drives the price up rapidly to $4,400. This level will turn the gamma dynamic positive, forcing market makers to take the opposite action to dampen price volatility.
Analyst: Options market data points to the possibility of ETH rising to $4,400
2025-08-09 02:02:53
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