In an exclusive interview with STS Digital, veteran trader Jeff Anderson shared his insights into the current price dynamics of Ethereum(ETH), predicting that it may remain in a tight range around $1,800 in the short term.
Anderson attributes this stability to market makers taking long gamma positions in ethereum options expiring on June 30, which incentivizes them to buy the asset when the price dips below that level, and when the price Sell assets when they rise, thereby ensuring a market-neutral portfolio.
The Ethereum market has been in a consolidation phase since mid-May, mostly trading in the $1,800 range. Anderson’s analysis suggests that this price stability is the result of market makers strategically managing their positions.
With ETH options expiring, expect them to continue to buy the asset when the price falls and sell when the price rises, in order to maintain their market-neutral stance.
“While market makers hold long gamma positions, ETH is unlikely to see significant volatility in the short term,” Anderson said.
He further explained that if the price of Ethereum rises, market makers may be inclined to sell their ETH holdings. Conversely, market makers take the opportunity to accumulate more ETH during a price dip.
The importance of the actions of market makers cannot be underestimated as they play a vital role in providing liquidity and ensuring efficient trading in the cryptocurrency market.
Their ability to balance demand and supply dynamics contributes to price stability and reduces volatility, especially within narrow price ranges such as the current Ethereum scenario.
Andreessen’s analysis reveals factors that affect Ethereum’s short-term trajectory. The presence of market makers with long gamma positions suggests a degree of predictability in the market, as their behavior is driven by a well-defined strategy.
Therefore, the price of Ethereum is expected to remain around $1,800 in the near future.