Today, options contracts for Bitcoin and Ethereum worth $5.01 billion will expire, affecting the cryptocurrency market. Given that both assets have recently experienced declines, this massive expiration may have an effect on short-term price action.
With Ethereum valued at $1.36 billion and Bitcoin options valued at $3.67 billion, traders are preparing for possible volatility.
High-Stakes Crypto Options Expirations: What Traders Should Watch Today
Compared to last week, there is a notable increase in the options that are expiring today. Deribit data indicates that 61,793 contracts are involved in the Bitcoin options expiration, up from 18,440 contracts the previous week. Comparably, the total number of Ethereum expiring options has increased to 538,872 contracts from 141,410 contracts the week before.
Expiring Bitcoin Options. Source: Deribit
The put-to-call ratio is 0.59 and the maximum pain price for these expiring Bitcoin options is $61,000. This suggests that despite the asset’s recent decline, sentiment is generally bullish. Their Ethereum counterparts, on the other hand, reflect a similar market outlook with a maximum pain price of $2,800 and a put-to-call ratio of 0.49.
Expiring Ethereum Options. Source: Deribit
One important metric that frequently directs market behavior is the maximum pain point. It stands for the price at which the majority of options expire worthless. Furthermore, the put-to-call ratios of Ethereum and Bitcoin, which are both less than 1, indicate that more traders are placing bets on price rises, indicating market optimism.
Implied volatility (IV) has slightly increased as a result of recent price declines and outside factors, like Nvidia’s earnings, according to Greeks.live analysts. They do point out that IV has generally declined over time, indicating a trend of retreat.
“Options data shows that [realized volatility] RV has fallen from a high of 100% on August 9 to 40% currently, with BTC’s actual volatility levels dropping dramatically, which is also a significant factor driving IV down,” the analysts added.
Analysts at Greeks.live also noticed a rise in long positions in block options trading. This circumstance suggests that some large-scale traders are getting ready for more price increases.
According to the most recent data, the value of Bitcoin has decreased by 3.26% from $61,150 on August 29 to $59,157. In a similar vein, Ethereum has dropped by 2.55% and is currently trading at $2,525 after hitting $2,592 in the same time frame.
Short-term price fluctuations brought on by options expirations frequently result in market uncertainty. However, as traders adjust to the new pricing environment, markets typically stabilize shortly after. It is anticipated by traders and investors that the high volume expiration of today will have a similar effect, possibly influencing future trends in the cryptocurrency market.