According to Deribit, 88,537 Bitcoin options contracts worth $14.38 billion are set to expire today, four times more than last week. The expiration is set for 11:00 AM Moscow time.
The put/call ratio for BTC options is 0.69, indicating bullish sentiment among investors. Meanwhile, the maximum pain point is at $85,000.
The maximum pain point is an important indicator that often influences the behavior of digital assets in the market. It is the price level at which holders of option contracts (both call and put) suffer the greatest losses.
The put/call ratio helps to understand the prevailing sentiment among investors. If the ratio is above 1, it means that they are pessimistic. Conversely, a value below 1 indicates optimism.
In recent months of the year, the put/call ratio for Bitcoin has been rising, which may indicate an increase in interest in hedging.
“Demand for downside protection has been growing for several weeks, possibly due to players looking to protect 2024 gains. The put/call ratio on open options contracts on December 27 has doubled from 0.35 in October to over 0.70 now,” said David Lavant, head of research at FalconX.
Also today, $3.7 billion worth of Ethereum options expire. They have a maximum pain point of $3,000 and a put/call ratio of 0.41. That ratio has fallen from 0.97 in late October, reflecting growing bullish sentiment on ETH.
At the time of writing, BTC and ETH are trading at $96,300 and $3,300 respectively, which is well above the aforementioned pain levels.
Some investors and analysts use the maximum pain price as an indicator to predict price movements. It is believed that markets often move toward this price to optimize profits for option sellers, usually large financial institutions.
"In a market that is heavily bullish, any significant decline could trigger a domino effect. This options expiration is in focus and could set the stage for 2025," Deribit commented.$BTC $ETH $BNB #BtcNewHolder
