Selling pressure has dominated the cryptocurrency market in recent days, driving sharp declines in Bitcoin and altcoins. Bitcoin has dropped below $73,000, while Ethereum, the largest altcoin, is hovering just above $2,000 and struggling to hold that level.
After $ETH’s weekly loss exceeded 15%, Coinbase Markets issued a critical assessment of Ethereum.
Ethereum Faces a Potentially Critical Threshold at $1,980
Coinbase Markets, which analyzes options market data for $ETH, said in a post on X that it holds a $589 million short gamma position around $1,980.
Coinbase Markets analysts said the $1,980 level stands out in the $ETH options market as a critical zone where price volatility could increase. Deribit data shows approximately $589 million in short positions at this level.
This positioning could accelerate Ethereum’s price movements in either direction.
Market makers with short gamma positions in the options market may need to trade in line with price movements to balance their risks. Coinbase said this could lead to increased selling when Ethereum’s price falls and increased buying when it rises.
Coinbase added that if $ETH retests $1,980, current support could weaken and price volatility could increase.
Coinbase also pointed to concentrated negative gamma and high open put options at $2,000. Known as a put wall, this area represents a significant price threshold in the options market. The concentration in the $1,980-$2,000 range could increase downward pressure on Ethereum.
*This is not investment advice.
