A signal hidden on the derivative market suggests that the ether (Eth) The rally could intensify, quickly raising the evaluations at $ 4,400.
The study indicator is the gamma net exposure of dealers / market manufacturers on the ether options classified by deribrated. Gamma is the critical metric for optional merchants, measuring how the Delta of an option, or its sensitivity to the price of the underlying assets, changes in response to market movements.
When dealers are a short gamma, they are forced to buy the underlying assets as its price increases and sells down its price, which often amplifies directional movements. The dealers provide liquidity to the order book and earn money from the bizarre spread while constantly endeavoring to maintain a net neutral exhibition at the price.
At the time of the press, there was a significant accumulation of short gamma between $ 4,000 and $ 4,400, according to the amberdata data source. With ether crossing more than $ 4,000, dealers could buy the assets to cover their exhibition, creating a self-reinforcing positive feedback loop which could quickly propel the higher price at $ 4,400. It is a level where gamma dynamics moves positive, forcing dealers to exchange against the market and stop prices.
This makes $ 4,400 a logical price magnet for the current rally.
“If the momentum on the market is strong enough to increase to $ 4,000, we also see the dealerships also become Net Buyers from ETH at higher prices, which has led to a quick rally at $ 4,400, the next Big Gama Inventory Level,” said Greg Magadini, director of derivatives in Amberdata, CoindSk.
