Značka: treasury

Ethereum options data shows pro traders expect strong resistance at $3,600

Ether (ETH) price has bounced 13% from its Jan. 9 low at $2,950, but it seems premature to call the move a cycle bottom. Instead, the larger bearish movement has prevailed and although it looks primarily correlated to Bitcoin (BTC) price, regulatory concerns and a tighter United States Federal Reserve policy have also been blamed for the movement.BTC and Ether have been under pressure since regulators focused their attention on stablecoins. On Nov. 1, the U.S. Treasury Department urged Congress to ensure that stablecoin issuers are regulated similarly to U.S. banks. ETH/USD price at FTX. Source: TradingViewCurrently, the descending channel formation initiated in mid-November shows resistance at $3,850 resistance. The average network transaction fees have also risen back above $50 and the longer that the Ethereum 2.0 upgrade takes to occur, the better the situation will be for competing chains.Regardless of the rationale behind Ether’s 28% price drop over the past six weeks, bulls missed the opportunity to secure a $300 million profit in the Jan. 14 weekly options expiry. Unfortunately for them, this $4,500 and higher scenario seems unfeasible at the moment.Ether options aggregate open interest for Jan. 14. Source: Coinglass.comThe call-to-put ratio shows an 89% advantage for bulls because the $380 million call (buy) instruments have a larger open interest versus the $200 million put (sell) options. The current 1.89 measure is deceptive because the recent Ether price drop caused most of the bullish bets to become worthless.For example, if Ether’s price remains below $3,300 at 8:00 am UTC on Jan. 14, only $24 million worth of these call (buy) options will be available, but there is no value in having the right to buy Ether at $3,300 if it is trading below that price.Related: Cointelegraph Consulting – A look at Terra’s ecosystemBears need ETH price below $3,300 to secure a $65 million profitBelow are the three most likely scenarios based on the current price action. The number of option contracts available on Jan. 14 for bulls (call) and bear (put) instruments vary depending on the expiry ETH price. The imbalance favoring each side constitutes the theoretical profit:Between $3,100 and $3,300: 7,400 calls vs. 27,800 puts. The net result favors bears by $65 million.Between $3,300 and $3,500: 22,200 calls vs. 19,300 puts. The net result is balanced between bulls and bears.Above $3,500: 32,500 calls vs. 15,600 puts. The net result is $60 million favoring the call (bull) instruments.This crude estimate considers call options being used in bullish bets and put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.For instance, a trader could have sold a put option, effectively gaining a positive exposure to Ether above a specific price. But, unfortunately, there’s no easy way to estimate this effect.Bulls don’t stand a chanceEther bulls would have had a decent $300 million advantage if the price held above $4,500. However, the current scenario requires a 6% positive move from $3,300 to $3,500 to generate a $60 million advantage. Considering there are less than 12 hours until Friday’s options expiry, bulls will likely concentrate their efforts on keeping the price above $3,300 to balance out the scales. The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

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US Treasury official beckons new stablecoin regulations

The United States Treasury made further hints at new laws for stablecoins on Dec. 17. Nellie Liang, the Under Secretary of the Treasury for Domestic Finance, fueled more stablecoin regulation speculation with comments on investors ‘potentially big risk’ when using stablecoins. Following on from the Financial Stability Oversight Council November 2021 report on stablecoins, the top official for financial oversight at the U.S Treasury stated that “If Congress does not enact legislation, the regulators will try to use what authority they have.”The Treasury has limited powers as broad strokes stablecoin regulation is not possible without the backing of a congressionally mandated authority. “They can do a little here and a little there, but if these are foundational to crypto assets and they aren’t stable, that could potentially be a big risk,” Liang stated of regulators’ powers.The preferred choice of leverage users and scalpers, stablecoins help traders get in and out of crypto assets. Tether (USDT), the largest stablecoin at over a $75 billion market cap, has been put under the microscope several times.In the most recent report in March this year, Moore Cayman, a Cayman Islands-based accounting network, affirmed that Tether Holdings Limited’s USDT stablecoin tokens are fully backed by its reserves. However, its widespread use continues to raise concerns among policymakers.Regulators claim that investor runs on stablecoin could wreak havoc on the market, while the sheer size of a market collapse could upset traditional financial markets if such a run took place. As a result, commentators such as Mark Cuban saw 2021 as the year of stablecoin regulation.Liang’s comments indicate that congress and the treasury may be at loggerheads when it comes to stablecoin regulation. In the November report, the Financial Stability Oversight Council stated that it is prepared to take steps on its own to address stablecoins if Congress fails to pass legislation.Her comments echo those of Federal Reserve Chairman Jerome Powell. At the Federal Market Open Committee (FOMC) meeting last Wednesday, he stated that “Stablecoins can certainly be a useful, efficient, consumer-serving part of the financial system if they’re properly regulated. And right now, they aren’t.”Related: Senate hearing on stablecoins: Compliance anxiety and Republican pushbackCongress, however, remains divided. Senator Elizabeth Warren of Massachusetts has a hard-nosed approach; “Stablecoins pose risks to consumers & to our economy. They’re propping up one of the shadiest parts of the crypto world, DeFi, where consumers are least protected from getting scammed. Our regulators need to get serious about clamping down before it is too late.”In contrast, Senator Pat Toomey for Pennsylvania welcomes stablecoins as an “exciting new technology that creates opportunities for faster payments, expanded access to the payment system, programmability, and more.”Curiously, proponents of Bitcoin (BTC) and cryptocurrencies as a whole would argue that any regulation of the stablecoin space is a case of shutting the stable door after the horse has bolted. Dylan LeClair, a prominent Bitcoin analyst, claims that stablecoins are “preferred collateral for bulls,” which is “good to see.”Furthermore, Alex Gladstein, Human Rights Foundation chief strategy officer tweeted that “Stablecoins are a bridge to a near future where Bitcoin users can-if they wish-peg holdings to any currency on mobile apps in a non-custodial non-KYC way outside the banking system, without needing altcoins, with instant global cheap payments.” In this sense, stablecoins are a stepping stone to broader Bitcoin adoption.

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