Ether Eyed at $4.4K: A Little-Known Indicator Signals a Potential Swift Surge

Ether’s Options Market Points to Potential Quick Surge Toward $4,400

A subtle but important signal from the ether options derivatives market suggests ETH could experience a rapid rally, pushing its price up to $4,400.

The indicator in focus is the net gamma exposure of market makers and dealers in the Deribit ether options market. Gamma measures how sensitive an option’s delta is to changes in the underlying asset’s price — a key factor for options traders.

When dealers are short gamma, they must buy ETH as prices rise and sell when prices fall, often intensifying price swings. Dealers provide liquidity and profit from bid-ask spreads, while trying to keep their overall exposure neutral.

Data from Amberdata reveals a significant short gamma concentration between the $4,000 and $4,400 strike prices. Since ether recently crossed above $4,000, dealers may buy ETH to hedge their risk, which can create a feedback loop driving prices higher. At around $4,400, the gamma exposure turns positive, leading dealers to counter-trade and dampen volatility.

This dynamic positions $4,400 as a key price target for the ongoing rally.

Greg Magadini, director of derivatives at Amberdata, explained to CoinDesk, “If momentum pushes ETH past $4,000, dealers tend to become net buyers at higher strikes, potentially sparking a swift rally to $4,400 — the next major gamma level.”