The expiration of $1.86 billion worth of Bitcoin (BTC) and Ethereum (ETH) options is leading to heightened volatility in the cryptocurrency markets. The latest data on the US Consumer Price Index (CPI), which was below expectations, has introduced uncertainty into the market.
As the expiration deadline approaches, traders and analysts are getting ready for possible price swings. Bitcoin currently holds options worth $1.4 billion that are slated to expire, whereas Ethereum’s options amount to almost $472 million.
The market is currently exhibiting a mildly bearish sentiment, where lower figures indicate optimism and bigger figures indicate pessimism. The release of the CPI statistics has generated speculation that the Federal Reserve may contemplate implementing a reduction in interest rates in the immediate future, resulting in a decline in the value of both Bitcoin and Ethereum.
Analysts at Greeks.live have seen a significant decrease in short-term implied volatility (IV) for both Bitcoin and Ethereum, indicating that traders are expecting less extreme price fluctuations.
Institutional sellers have successfully obtained profits amidst recent falls, and the options market has regained a more solid framework, with longer-term options exhibiting greater anticipated volatility in contrast to near-term ones. As the expiration date nears, the market may probably see additional volatility as traders modify their holdings in anticipation of the expiration.
