Ethereum News Today: Ethereum Price Could Surge to $4,400 as Dealer Gamma Exposure Triggers Buying Cycle

A potential catalyst for a rapid price surge in Ethereum (ETH) has emerged from a technical signal in the Deribit-listed ether options market. Currently, dealers exhibit negative gamma exposure between $4,000 and $4,400, which could trigger a self-reinforcing buying cycle as prices rise. This dynamic suggests the possibility of a swift rally toward $4,400, driven by dealers' hedging behaviors [1].

Gamma, a key metric in derivatives trading, measures the rate of change in an option’s delta as the underlying asset’s price fluctuates. When dealers are short gamma—meaning they are exposed to increasing directional risk as the market moves—they are forced to buy the asset as prices rise and sell when prices fall. This mechanism can amplify trends and create momentum in the market [1]. With ether trading above $4,000, dealers are now compelled to hedge their positions by purchasing more ETH, creating a reinforcing feedback loop that could push prices toward $4,400.

According to Amberdata analysts, the price level of $4,400 represents a critical gamma flip point. At this level, the dynamic shifts from negative to positive gamma, causing dealers to trade against the market and stabilize price movements [1]. Greg Magadini, director of derivatives at Amberdata, noted that if the $4,000 resistance is broken, dealers could become net buyers at higher levels, fueling a rapid rally toward $4,400. “We see dealers also become net buyers of ETH at higher prices, potentially leading to a quick rally to $4,400,” Magadini said [1].

Market observers are monitoring dealer behavior as a key indicator of short-term price direction. If ether maintains upward momentum above $4,000, the resulting dealer activity could accelerate the move toward $4,400. As options activity in the ether derivatives market intensifies, the interplay between dealer gamma exposure and price action is becoming a key barometer for the asset’s near-term trajectory [1].

Source: [1] Ether to $4.4K? This Hidden Signal Suggests a Possible Quick Fire Rally (https://www.coindesk.com/markets/2025/08/08/ether-to-usd4-4k-this-hidden-signal-suggests-a-possible-quick-fire-rally)