Today marks a significant event for the cryptocurrency market: nearly $4.26 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire. This large expiration is expected to cause significant market volatility, creating potential fluctuations as traders and investors brace for a busy day.
Bitcoin options are about to expire: $3.36 billion is at stake
A significant portion of the expiring contracts comes from Bitcoin options. According to Deribit, over 217,000 Bitcoin contracts, worth approximately $3.36 billion, will settle today. With a put-call ratio of 0.60, there are more call positions than put positions, indicating an overall bullish sentiment.
However, Bitcoin's maximum pain price is $98,000, slightly lower than the current spot price of $99,758. Although Bitcoin's recent rise to $103,000 is notable, the recent price drop has caused many leveraged positions to be liquidated.
However, strong buying activity in the spot market shows optimism, although high funding rates for leveraged positions could lead to a potential pullback.
Ethereum options worth $900 million are about to expire
Ethereum also has a large expiration day today, with over 1.7 million contracts worth approximately $900 million set to expire. Interestingly, Ethereum traders appear to be more optimistic than Bitcoin traders, with a put-to-call ratio of 0.46.
However, the most painful price level is $3,700, which is a crucial price point for both the bulls and bears, as it could determine the next price direction for ETH.
Is the Christmas rally about to happen?
With options about to expire, traders are now wondering if a price rally could occur before Christmas. The market shows Bitcoin and Ethereum moving in different directions, with Bitcoin holding below $100,000 and Ethereum just below $4,000. The next few days could be very important as traders adjust their positions and prepare for year-end.
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