$10.31 Billion in Bitcoin and Ethereum Options Contracts Set to Expire Today
A significant event is set to unfold in the crypto market today with a whopping $10.31 billion worth of Bitcoin and Ethereum options contracts reaching their expiration. This massive expiration event has the potential to shake up short-term price action, particularly considering the recent downturn in the prices of both assets.
The Bitcoin options in question are valued at an impressive $8.36 billion, closely followed by Ethereum options at $1.94 billion, indicating that traders are gearing up for possible turbulence ahead.
The stakes are high as today's expirations surpass those of the previous week, marking the culmination of a month-long cycle. Data from Deribit reveals that the number of Bitcoin options expiring has surged to 80,179 contracts, a substantial increase from the 30,645 contracts expiring last week. Similarly, the expiring Ethereum options have risen to a staggering 603,426 contracts, compared to 173,830 contracts last week.
The data suggests that market sentiment remains predominantly bullish, with the maximum pain price for expiring Bitcoin options set at $98,000 and a put-to-call ratio of 0.68. On the Ethereum front, the maximum pain price stands at $3,300, with a put-to-call ratio of 0.43, underlining a similar optimistic outlook.
As the options expirations draw near, traders are advised to proceed with caution, as such events have the potential to trigger significant market volatility. Analysts warn of sharp price swings and potential liquidations as traders adjust their positions ahead of the expiry.
While Bitcoin has experienced a slight decrease in trading value, dropping by 0.64% to $104,299, Ethereum has seen a modest uptick of 1.04%, now trading at $3,226.
As both assets near their respective strike prices, as indicated by the Max Pain theory, market participants can anticipate heightened volatility in the coming hours. This theory suggests that options contracts tend to gravitate towards the strike prices upon expiry, potentially leading to increased market fluctuations.
In light of these developments, traders and investors should remain vigilant and stay informed on how the options expiry could impact the broader crypto market trends heading into the weekend.