In the cryptocurrency market, $3.98 billion worth of Bitcoin and Ethereum options contracts will expire today. This large amount could affect short-term price movements, especially since both assets have been in decline recently. For this reason, investors are warned to be prepared for possible fluctuations.$BTC
Giant Bitcoin and Ethereum Options Expiration: Get Ready for Volatility!
, the market is generally moving in a downward direction today. In the midst of this decline, the expiration of massive options contracts is taking place. According to Deribit data, the number of Bitcoin options expiring contracts decreased from 48,794 last week to 38,566 this week. Similarly, Ethereum options expiring contracts decreased from 294,380 to 189,018.
For Bitcoin, the maximum pain price of expiring options is at $79,500. In addition, Bitcoin’s put/call ratio was recorded as 0.85. This shows that the asset is generally showing an upward trend despite the recent price decline. For Ethereum, the maximum pain price is $3,000 and the put/call ratio is at 0.92. This shows that Ethereum has a similar market outlook to Bitcoin.
The maximum pain point represents the price level at which the majority of option contracts become worthless, causing maximum financial “pain” to investors. Put/call ratios below 1 for Bitcoin and Ethereum indicate that more investors are expecting a price increase and that there is a generally optimistic sentiment in the market. Put options represent bets on a price decrease, while call options represent bets on a price increase. These two metrics are used together to measure overall market sentiment.
Options expirations often lead to short-term price fluctuations. This creates uncertainty in the market, forcing traders and investors to prepare for volatility. “The market can be very volatile, so trade with caution,” warns crypto influencer Wise Advice.
There is generally optimism in the market that Bitcoin’s upside potential continues. Some analysts predict that BTC could reach $100,000 by the end of the year. However, there are many options expiring by the end of the month and other large options contracts potentially coming into play on December 27 (worth around $11.8 billion for BTC) that could cause larger movements in the market. These dates are critical, considering that Bitcoin bull runs typically tend to end in November and December.
The expiration of Bitcoin options at the end of the year could be a significant price catalyst and could influence the direction of the market heading into 2025. Bulls see this period as a great opportunity to break out beyond $100,000. On the other hand, bears continue to pressure the market by holding their positions to limit price discovery. Greeks.live notes that the market is clearly polarized and that trading is quite fragmented. While large traders are still focused on the upside with long positions, more traders are currently opting to remain in the market with short positions.
