Ether'southward (ETH) price rallied 50% leading in the London difficult fork considering many investors expect the upgrade to solve the issue of high transaction fees and make the altcoin a deflationary nugget.

Pantera Capital CEO Dan Morehead has predicted that the upcoming upgrade would likely crusade Ether to "flip" Bitcoin (BTC) as the leading cryptocurrency, but this is a topic under heavy contention.

To understand the bear on of the recent price motion, traders should analyze the weekly options death. Deribit derivatives currently concord an 86% market place share in this segment, and the aggregate open interest for Fri currently stands at $357 million.

ETH Aug. 6 options aggregate open interest. Source: Bybt

The neutral-to-bullish call (buy) selection provides upside price protection to buyers, and the protective put (sell) pick holders are safeguarded from downside toll movements. By measuring each option'due south price-risk exposure, traders can amend understand how bullish or surly traders are positioned.

Options data shows bears were defenseless by surprise

The initial view shows a reasonably balanced state of affairs because the call-to-put ratio stands at 1.15, which slightly favors the neutral-to-bullish call option by 15%. This indicator reflects the 70,956 telephone call options that are equivalent to $191 one thousand thousand in open up involvement, stacked against 61,632 put options, which reverberate $166 million in open up interest.

Equally the chart indicates, bears were non expecting Ether to attain $2,700, and this tin be seen where in that location are no protective put options (pink area) above that strike toll.

If Ether remains in a higher place this level by Friday, all of those 61,653 contracts volition become worthless. This is extremely unusual and reflects only how unexpected the strong up price motility was.

The bulls' reward largely depends on Ether at $2,600

While every protective put option becomes worthless above $2,700, role of the neutral-to-bullish call options has been placed at $2,800 and $3,000. This means that even if Ether sustains at $2,700, 39% of the call options' $191 million in open interest becomes worthless.

At $2,700, the neutral-to-bullish call options have a $116-million advantage. However, if Ether trades below $two,600 at Friday's decease, this figure will decrease to $75 meg.

Either way, these weekly options largely favor bulls and boost their reserves for boosted bets for the upcoming expiries in August. Bears should prepare to lick their wounds and look for a local acme earlier trying new bearish options trades.

The views and opinions expressed hither are solely those of the author and exercise non necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, y'all should conduct your ain research when making a decision.