Ethereum is facing downward pressure as a substantial $6 billion in options are set to expire on December 26. This expiry event, coupled with existing market dynamics, has created uncertainty among traders.
Ether (ETHUSD) has struggled to maintain prices above $3,400 over the past several weeks, signaling that bears may maintain control. Currently, Ethereum's price is around $2,942.9, reflecting a 1.52% decrease in the last 24 hours.
The $6 billion Ethereum options expiry on December 26 is a significant factor. Before a 28% crash in November, bulls had anticipated year-end prices of $4,000 or higher. The expiration will reveal whether bears retain control, which will be determined by Ether's price at 8:00 am UTC on Friday. Call options (buy) outnumber put options (sell) by a ratio of 2.2. However, a large portion of these call options, totaling $4.1 billion, are likely to expire worthless, as bullish bets were concentrated on Ether reaching $3,500 to $5,000 by year-end. Less than 15% of the call options were positioned at $3,000 or lower.
Even when excluding the most optimistic calls at $5,000 and above, less than 25% of the options were placed below $3,200. While bulls were overly confident about Ether reclaiming $3,400, bearish strategies may have also been too aggressive in clustering bets between $2,200 and $2,900. If Ether trades above $2,950 on Friday, over 60% of the $1.9 billion in put options will expire worthless. Nevertheless, bearish positions are better positioned as long as ETH remains below $3,200.
Technical analysis reveals that Ethereum continues to show weakness, struggling to build any significant recovery despite holding above local support. Hesitation among market participants is apparent, driven by broader uncertainty and a lack of bullish momentum from Bitcoin. ETH is currently trading below the key $3,300–$3,700 supply zone, where the 200-day and 100-day moving averages act as major dynamic resistance. This zone has consistently rejected the price over the past month, confirming it as a key battleground between buyers and sellers. The RSI on the daily timeframe remains below 50, indicating weak momentum and continued bearish pressure. A failure to break above the $3,300-$3,700 zone soon increases the probability of a pullback towards the $2,700 support zone.
On the 4-hour chart, the structure has become fragile after ETH failed to hold the lower channel trendline and broke back below the ascending channel. An uptrend attempt near $3,100, followed by a lower high, signals a loss of bullish strength. The asset is currently hovering just above the $2,800 support level, which is acting as short-term support, but there is no aggressive buying. If the $2,800 support zone breaks, a quick drop toward the $2,600 area is likely.
Open interest in Ethereum remains high at around $18 billion across all exchanges, even as the price struggles to push higher. This disconnect between stable open interest and flat-to-downward price action often signals a build-up of speculative leverage, particularly from longs.
Analysts have also noted a potential head and shoulders pattern forming, which could suggest a drop to $2,400 if a breakdown occurs. ETH has traded between $2,800 and $3,400 for the past month, with Q4 seeing a 28.76% drop. If the $3,000 level fails, a retest of $2,700-$2,800 is anticipated.
