Since failing to close above the $2,000 mark, Ether (ETH) price has faced a steep 16.8% correction, but this was not enough to give bears an edge in the August $1.27 billion monthly options expiry.

Currently, there are mixed feelings about the network’s upcoming change to a proof-of-stake (PoS) consensus network and analysts like @DWhitmanBTC believe the potential benefits of PoS do not supersede the absence of a supply cap and multiple changes in the monetary policy over time.

uLtRaSoUnD mOnEy

Is #Ethereum even money?

If so, what’s the supply limit? What’s the monetary policy?

How can anyone trust that it won’t be changed?

— Dick Whitmanaut ?/21M (@DWhitmanBTC) August 24, 2022

Regardless of the long-term impact, Ether price was positively impacted by the tentative Merge migration date announcement from a July 14 Ethereum developers call. Influencer and technical analyst Crypto Rover said that Ether would “drop so hard on the Merge day,” as a result of traders unwinding their positions.

I think #Ethereum will drop so hard on the Merge day.

The whole anticipation is getting not bought up on the spot market but on the futures market.

Be warned.

— Crypto Rover (@rovercrc) August 23, 2022

One thing is for sure, leveraged Ether buyers were not expecting the steep correction on Aug. 18 and data from Coinglass shows the move liquidated $208 million at derivatives exchanges.

Bears placed their bets below $1,600

The open interest for Ether’s July monthly options expiry is $1.27 billion, but the actual figure will be lower since bears were overly-optimistic after ETH traded below $1,600 between Aug. 20 and 22. Breaking above that resistance surprised bears because only 17% of the put (sell) options for Aug. 26 have been placed above that price level.

The 1.18 call-to-put ratio shows the dominance of the $685 million call (buy) open interest against the $585 million put (sell) options. Nevertheless, as Ether stands near $1,650, most of these bearish bets will become worthless.

If Ether’s price remains above $1,600 at 8:00 am UTC on Aug. 26, only $95 million put (sell) options will be available. This difference happens because a right to sell Ether at $1,600 or lower is worthless if Ether trades above that level on expiry.

Bulls completely dominate the August expiry

Below are the three most likely scenarios based on the current price action. The number of options contracts available on Aug. 26 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

• Between $1,500 and $1,600: 108,200 calls vs. 103,900 puts. The net result is balanced between bulls and bears.
• Between $1,600 and $1,700: 45,900 calls vs. 90,000 puts. The net result favors the call (bull) instruments by $150 million.
• Between $1,700 and $1,800: 192,700 calls vs. 26,000 puts. Bulls’ advantage increases to $290 million.

This crude estimate considers the put options used in bearish bets and the call options exclusively in neutral-to-bullish trades. Even so, this oversimplification disregards more complex investment strategies.

For example, a trader could have sold a put option, effectively gaining positive exposure to Ether above a specific price, but unfortunately, there’s no easy way to estimate this effect.

Related: Ethereum Merge in trouble? Developers find bugs ahead of the planned update

Bears could avoid a $150 million loss

Ether bulls need to sustain the price above $1,600 on Aug. 26 to secure a $150 million profit. On the other hand, the bears’ best-case scenario requires a push below $1,600 to balance the scales and call it a draw.

Considering the brutal $270 million leverage long (buy) positions liquidated on Aug. 18 and 19, bulls should have less margin to pressure ETH price higher. With that said, bulls are unlikely to have the means to drive ETH above $1,700 ahead of the August monthly options expiry.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.