More than $10 billion in Bitcoin and Ethereum options expire today: possible impact

A host of Bitcoin (BTC) and Ethereum (ETH) options expire today. Let's find out how this will affect the price of the underlying assets.

Cryptocurrency options are derivative contracts that allow traders to buy or sell an asset at a specific price on a specific expiration date. If the option owner decides not to buy or sell cryptocurrency, he or she is not obligated to do so. This makes options a more flexible instrument than futures, which require you to close a position regardless of profits or losses. Let's investigate whether the expiration can cause greater volatility in the market and affect the price of the two largest cryptocurrencies by capitalization.

Options Traders Overestimated Trend Strength

The expiration is particularly important as it marks the end of the first half of 2024 and is historically the second highest across all markets, including the stock market. The face value of the 107,424 BTC contracts and 1,043,956 ETH contracts that will soon expire is $6.6 billion and $3.6 billion, respectively.

According to Deribit, the BTC put/call ratio remains at 0.50. This means that traders expected a bullish outcome and the number of calls, or long contracts, exceeded the number of puts, or short contracts.

The maximum pain point, that is, the price at which the asset will cause financial losses to the greatest number of holders, is at $57,000. Earlier this week, Bitcoin price approached this point, correcting to $58,000, but then rose back above $61,000. 8$BNB