Over $2.5 billion worth of Bitcoin and Ethereum options contracts are on the verge of expiry this Friday. The market turbulence caused by recent US economic data, including CPI and PPI, has left traders wondering if the expiration of derivatives today could drive prices up over the weekend.
Bitcoin (BTC) is struggling to reclaim the $100,000 milestone, as the impact of macroeconomic factors continues to sway investor sentiment.
Today marks the expiration of approximately 21,362 Bitcoin options contracts, valued at a staggering $2.07 billion, according to Deribit data. The current put/call ratio stands at 0.66, indicating a preference for purchase options (calls) over sales options (puts).
As these Bitcoin options reach their expiration, the maximum pain or strike price is set at $98,000, potentially causing financial distress for a significant number of holders.
Additionally, 176,742 Ethereum contracts, totaling $479.01 million, are set to expire today, with a put-to-call ratio of 0.64 and a maximum pain point of $2,725.
Although this week's options expiry event is relatively smaller compared to the last week's $3.12 billion BTC and ETH options expiration, it is anticipated to impact market volatility. Traders and investors are advised to closely monitor developments following the expiration.
Despite the expiration-induced price fluctuations, the market remains optimistic as indicated by put-to-call ratios below 1 for both Bitcoin and Ethereum options trading. This signifies a bullish trend, as traders are inclined towards expecting price appreciation.
Recent market sentiments have seen a tepid consolidation, with Greeks Live commenting on the decrease in implied volatility levels despite positive news from the US government. This signifies an expectation of reduced price swings affecting options pricing and trading strategies.
The approaching expiration of options contracts at 8:00 UTC today could potentially drive Bitcoin and Ethereum prices towards their respective maximum pain points, currently estimated at $96,714 for BTC and $2,696 for ETH.
Analysts caution that market activity could dip during February, impacting trading volumes and crypto prices. However, post-expiration settlement by Deribit, BTC and ETH prices are anticipated to stabilize, albeit with potential heightened volatility in the coming days.