Bitcoin and Ethereum Face Volatility: $2.6B Options Expiring
The cryptocurrency market has $2.62 billion worth of Bitcoin and Ethereum options contracts set to expire today. This massive expiration could impact short-term price movements, especially with both assets falling recently.
With Bitcoin (BTC) options worth $2.02 billion and Ethereum (ETH) options worth $598.99 million, traders are bracing for the potential volatility.
What traders should pay attention to More than $2.6 billion in options expire
Options expiring today are down slightly from last week. According to Deribit data, Bitcoin options expiration involved 20,728 contracts, compared with 20,815 contracts last week. Likewise, Ethereum options expiring totaled 174,863 contracts, up from 164,330 contracts the previous week.
For Bitcoin, the highest pain price for options at expiration is $110,000, with a put to call ratio of 0.87. Although the asset has pulled back recently, this is indicative of a generally bullish sentiment in the market.
By comparison, Ethereum’s counterpart saw a peak pain price of $3,700 and a put-to-call ratio of 0.48, reflecting a similar market outlook.
The biggest pain points are key indicators that often guide market behavior. It represents the price level at which most options expire worthless.
Additionally, both Bitcoin and Ethereum’s put-to-call ratios are below 1, indicating optimism in the market and more traders betting on rising prices. However, with a large number of options expiring, traders and investors should be prepared for the potential risks volatility.
“Option expirations may lead to increased volatility as traders adjust their positions. Watch for potential moves in SPX and BTC as they may react to these market dynamics.” A user on X shared.
Can option expiration promote market recovery?
It’s worth noting that these expiration options come as Bitcoin pulls back to $94,235. As of this writing, the Pioneer cryptocurrency is trading at $97,157down It’s up nearly 4% since Friday’s open.
Bitcoin’s biggest pain point is $101,000, which is well below its execution price. Ethereum, on the other hand, is trading at $3,392 USDwell above the painfully high price of $3,700. According to the maximum pain theory, the prices of BTC and ETH are likely to be close to their respective execution prices, resulting in the expected volatility.
This happens because of the maximal pain theory options trading The operating assumption is that option sellers are typically large institutions or professional traders. Therefore, they have the resources and market influence to push the closing price into the biggest pain point on expiration.
Therefore, for Bitcoin, this means a possible recovery, with the possibility of re-breaking the $100,000 milestone.
“Training all night doesn’t look good. The saving grace might just be a bunch of worthless options expiring tomorrow.” One user on X joke.
At the same time, it should not be overlooked that while option expirations often result in short-term price fluctuations, the market usually stabilizes quickly as traders adjust to the new price environment. With a large number of expirations today, traders and investors can expect similar results that could influence future cryptocurrency market trends, especially over the weekend.
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