Today, approximately $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options contracts will expire, creating significant anticipation in the cryptocurrency market.
These cryptocurrency options contracts expire before President-elect Donald Trump’s inauguration week. Bitcoin is leading the trend as it regains the $100,000 mark.
Over 2.8 billion USD of Bitcoin and Ethereum options contracts expire
According to Deribit data, 21,664 Bitcoin contracts, with a nominal value of about $2.2 billion, will expire today. Bitcoin’s put-to-call ratio is 0.94.
The maximum pain point — the price at which the asset causes the greatest loss for the most Holders — is $96,000. Here, most contracts will become worthless.
Similarly, the cryptocurrency market will see 182,454 Ethereum contracts expire, with a notional value of $612.2 million. The put-to-call ratio for these Ethereum options is 0.36, with a maximum pain point of $3,250.
As options expire often lead to significant price movements, it is important for traders and investors to closely monitor today’s developments. Put-to-call ratios below 1 for both Bitcoin and Ethereum indicate optimism in the market. This implies that many traders are betting on rising prices, reflecting positive sentiment in the market.
Bitcoin reclaiming the $100,000 mark is consistent with this optimism. Meanwhile, analysts at Greeks.live link this sentiment to expectations about the term of President Donald Trump, who promises to be a “Crypto President,” which could positively influence the industry policies. Analysts also pointed to expectations of no interest rate cuts, which could impact market sentiment towards cryptocurrencies.
“Bitcoin rose again past 100,000 USD, erasing the gloomy market sentiment over the weekend… Trump will officially take office next week and it is worth noting whether he will implement policies beneficial to cryptocurrencies this month . US shares have been rising over the past few days and the month-end interest rate meeting will focus on maintaining no rate cuts,” Greeks.live share on X (Twitter).
That said, analysts note that short-term options implied volatility (IV) has increased, with a significant increase in longer-term strength. With this in mind, they advise investors to partially buy short-term options, focusing on expected policy changes with the incumbent government and flows of ETFs (exchange-traded funds).
Furthermore, Greeks.live highlights how the trading behavior of different regions affects Bitcoin prices. Asia and Europe sold Bitcoin, leading to a drop in price, which was bought by the Americans, turning the price positive. This reflects the global interaction in the cryptocurrency market.
“Asia and EU sell BTC today and then the US buys it all back when prices are low? Turning a red day into a green day for BTC,” the post read read.
Despite the somewhat ironic commentary on this price action, this interaction, right before the expected volatility due to Trump’s inauguration, shows the underlying backdrop of political events influencing sentiment market.
Data from TinTucBitcoin shows that currently, Bitcoin is trading at 101,187 USD. This represents a modest gain of 1.62% since Friday’s trading open.