Bitcoin and ether , the top two cryptocurrencies by market value, have been unusually calm for over two weeks. The range play probably stems from the market running into competing narratives and influences.of crypto options market makers, partly responsible for keeping prices rangebound, according to observers.
Market makers, therefore, are always on the opposite side of investors and maintain a delta-neutral book by actively buying and selling the underlying asset in the spot or futures market as the price swings.or writing call options or bullish bets, a popular volatility-selling strategy aimed at generating a yield on top of spot market holdings. As such, market makers have been stuffed with long call positions or positive gamma.
"In the absence of a catalyst/narrative to start taking a directional risk, that systematic, mechanical volatility selling will keep weighing," Brickell added. "In the case of positive gamma, the delta hedging behavior of market makers is to sell high and buy low, which compresses the price movement range to near the strike price," Ardern told CoinDesk."After the settlement, the sticky effect of hedging on the price will significantly weaken, but there could be stronger resistance, particularly in ETH. It is necessary to be careful about the risk of ETH price going downwards.