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The 4k and 100k levels are lines in the sand for ETH and BTC. The majors breached these key levels last week before trading lower for most of today.

Looking at the tenor with the highest OI, 27DEC24, those levels coincide with the strikes with the highest OI: ETH-27DEC24-4k (90k contracts) and BTC-27DEC24-100k (16k contracts). So, will there be a squeeze higher if spot trades higher as dealers look to cover?

We’re less inclined to think so. Just today, we saw takers taking profit on their long BTC-27DEC24-100k-C positions and possibly rolling them out to March (130k–150k). This indicates there should be ample supply of topside gamma. Furthermore, perp funding is flattish on Deribit and slightly higher than usual on major exchanges, making a flush to the topside less likely.

Although we’re still structurally bullish, spot is likely to range here for the remainder of the holiday season. Historically, ETH does not usually put in a new all-time high until January of the post-halving year. This sentiment is also reflected in the options market, where ETH risk reversals are skewed toward calls only from January onwards.

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