Ether (ETH) price rallied 50% leading in the London hardfork because many investors expect the upgrade to solve the issue of high transaction fees and make the altcoin a deflationary asset.

Pantera Capital CEO Dan Morehead has predicted that the upcoming upgrade would likely cause Ether to ‘flip’ Bitcoin (BTC) as the leading cryptocurrency but this is a topic under heavy contention.

To understand the impact of the recent price movement, traders should analyze the weekly options expiry. Deribit derivatives currently holds 86% market share in this segment and the aggregate open interest for Aug. 6 currently stands at $357 million.

The neutral-to-bullish call (buy) option provides upside price protection to buyers and the protective put (sell) option holders are safeguarded from downside price movements. By measuring each option’s price risk exposure, traders can better understand how bullish or bearish traders are positioned.

Options data shows bears were caught by surprise

The initial view shows a reasonably balanced situation because the call-to-put ratio stands at 1.15 which slightly favors the neutral-to-bullish call option by 15%. This indicator reflects the 70,956 call options that are equivalent to a $191 million open interest, stacked against 61,632 put options which reflect $166 million in open interest.

As the chart indicates, bears were not expecting Ether to reach $2,700 and this can be seen where there are no protective put options (pink area) above that strike price.

If Ether remains above this level by Aug. 6 all of those 61,653 contracts will become worthless. This is extremely unusual and reflects just how unexpected the strong upwards price move was.

The bulls’ advantage largely depends on Ether at $2,600

While every protective put option becomes worthless above $2,700, part of the neutral-to-bullish call options has been placed at $2,800 and $3,000. This means even if Ether sustains at $2,700, 39% of the call options’ $191 million open interest becomes worthless.

At $2,700, the neutral-to-bullish call options have a $116 million advantage. However, if Ether trades below $2,600 at the Aug. 6 expiry, this figure will decrease to $75 million.

Either way, these weekly options largely favor bulls and boost their reserves for additional bets for the upcoming expiries in August. Bears should prepare to lick their wounds and wait for a local top before trying new bearish options trades.

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