$5.79 Billion in Bitcoin and Ethereum Options Set to Expire Today
Today marks a significant event in the cryptocurrency market as approximately $5.79 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are due to expire. Market watchers are closely monitoring this expiration as it has the potential to impact short-term trends based on the volume of contracts and their notional value. Analyzing put-to-call ratios and maximum pain points can offer valuable insights into traders' expectations and potential market directions.
Insights on Today’s Expiring Bitcoin and Ethereum Options
The notional value of the expiring BTC options stands at $4.68 billion, with 58,633 options set to expire today. Deribit's data reveals a put-to-call ratio of 0.71 for these Bitcoin options, indicating a higher prevalence of purchase options (calls) over sales options (puts). The maximum pain point for these options is identified at $96,000, representing the price that could lead to the greatest financial losses for holders.
In addition to Bitcoin options, 527,277 Ethereum options contracts, with a notional value of $1.109 billion, are also set to expire today. These options exhibit a put-to-call ratio of 0.52 and a maximum pain point of $3,000.
This week's expiring options show a notable increase compared to the previous week. The influx of expiring options for the month is attributed to the trading preferences of many institutional traders and funds, who often engage in monthly options trading. The end of the month also prompts large funds and market makers to adjust their portfolios by rolling over or closing positions.
Implications of Today’s Options Expiry on BTC and ETH Prices
Traders are adapting their strategies in anticipation of potential market volatility post-expiration. Some traders are considering repositioning to call ratio spreads as a defensive measure, foreseeing choppy Bitcoin price action with a possible retest of $88,000 before a clear direction is established.
According to Deribit, traders are preparing for increased volatility and hedging against declining crypto prices back to levels witnessed post-election day. The current cautious outlook follows US President Donald Trump's imposition of tariffs on various countries, including Mexico, Canada, China, and Europe, which had a negative impact on Bitcoin and the broader crypto market.
As of now, the max pain prices for both Bitcoin and Ethereum remain higher than their current market values. Bitcoin is trading at $79,890, while ETH is valued at $2,137. The significant difference between the max pain price and spot price could prompt options sellers to drive prices closer to the pain level.
As the month-end approaches, PowerTrade advises BTC options traders to keep an eye on the $98,000 max pain price with a substantial $5 billion notional value. This concentration of open interest around $98,000 may lead to increased volatility and potential price movement toward that level.