The Cryptocurrency Market will see $3.42 billion in Bitcoin and Ethereum options expire today. This huge expiration could cause a temporary impact on the price, especially as the market is eagerly waiting for Bitcoin to hit the $100K USD mark.
With Bitcoin options worth $2.86 billion and Ethereum options at $561.66 million, traders are bracing for the possibility of volatility.
Unlike Ethereum, Traders Bet on Bitcoin’s Price Fall
There is a significant increase in Bitcoin (BTC) and Ethereum (ETH) contracts expiring today compared to last week. According to data from Deribit, 28,905 Bitcoin options contracts will expire on Friday with a put-to-call ratio of 1.09 and a maximum pain point of $86K.
On the other hand, 164,687 Ethereum contracts will expire today, with a put-to-call ratio of 0.66 and a maximum pain point of $3,050.
Bitcoin’s put-to-call ratio stands above 1, indicating an overall bearish sentiment even though large investors and long-term holders of BTC are driving its recent growth. In comparison, Ethereum counterparts have a put-to-call ratio of 0.66, reflecting a positive market outlook.
The put-to-call ratio is used to measure market sentiment. Put options represent bets on price decline, while call options represent bets on price increase.
When the ratio is above 1, it indicates a lack of optimism in the market, with many traders betting on price declines. Conversely, a put-to-call ratio below 1 shows optimism in the market, and many traders are betting on price increases.
Bitcoin Put-to-Call Ratio, Impact on BTC
As options near expiration, traders are betting on the price of BTC to fall and the price of ETH to rise. According to the Max Pain theory in options trading, BTC and ETH will likely pull towards their maximum pain points (strike prices) at $86K USD and $3,050 USD, respectively. This is where the largest number of contracts—both calls and puts—will expire worthless.
Notably, price pressure on both assets will ease after Deribit settles the contracts at 08:00 UTC today. However, at this time, BTC is trading at $98,876, while ETH is trading at $3,389. At the same time, in line with the put-to-call ratio, analysts at Greeks.live forecast a move further north for ETH and say BTC is on the verge of a correction.
“With around 8% of positions expiring this week, the massive boom in Ethereum has led to a significant increase in IV [độ biến động ẩn] of ETH long options, while the IV of BTC long options remains relatively stable. Current market sentiment is extremely bullish,” say analysts at Greeks.live said.
Analysts also note that while Bitcoin is at risk of a correction, the surrounding market boom helps prevent this potential decline. They attribute the market optimism to significant capital growth in ETFs (exchange-traded funds), especially BlackRock’s IBIT options, which began trading recently in conjunction with the bullish market. strong right away.
However, with today’s high volume expiry, traders should anticipate fluctuations in Bitcoin and Ethereum prices that could shape their short-term trends.