Even after collecting more than 40% in the months of May and July, the $4,000 level remains elusive for Ethereum. The fact that Altcoin was unable to clear this level indicates that this is a resistance to beat as Ethereum continues its uptrend. It also shows that Altcoin has the power to keep this $4,000 from breaking, and one market expert has a unique interest in keeping the price under $4,000, due to a hedge fund.
Ethereum over $4,000 makes sense for options traders
At X Post, trader and market analyst Glengoodman has announced another angle against the beatdown, which is suffering continuously at the Ethereum price level at $4,000. This elusive price tag remains a singular obstacle to the possibility of an ETH price that will break the $4,800 peak from 2021, and continued transactions below this price could be deliberate.
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Goodman’s post focuses on options traders and the hedge funds they are betting on. Essentially, hedge funds are still short Ethereum at this point, so you need to keep prices down and not reclaim $4,000 to keep your position profitable.
These professional traders or hedge funds are “sellers” who write options and can get the premium to do so. After that, buyers are actually betting on Ethereum prices of over $4,000, making them paying the seller a premium. So, every time Ethereum price reaches $4,000, it is defeated, allowing hedge funds to continue profiting from premiums created by buyers.
What happens when ETH clears $4,000?
If Ethereum prices exceed $4,000, it means that hedge funds start losing money and option buyers start making money. As Crypto Trader explains, the higher the ETH price, the more money buyers need to make and the more money hedge funds lose. This is why it seems like there’s always a violent pullback whenever Ethereum approaches $4,000, as hedge funds keep it short.
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Goodman explained that hedge funds were able to use this strategy to keep Ethereum prices below $4,000 and maintain profits. However, every time Altcoin approaches the $4,000 level, there is a higher chance of it exceeding it.
For a long time, Ethereum’s price is incredibly bullish to break $4,000. “Strong resistance starts at $4,000, so if you beat all the resistance of the early 4000s, the price could really fly,” Goodman explained.
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