Nearly $4.6 billion in Bitcoin (BTC) and Ethereum (ETH) options are set to expire today, marking a key moment for crypto market volatility following the US elections and recent Federal Open Market Committee (FOMC) updates. Analysts expect heightened market activity as this event could prompt strategic year-end adjustments.
A total of 48,794 Bitcoin options, valued around $3.7 billion, and 294,380 Ethereum options, worth $854 million, are expiring. Bitcoin’s maximum pain point—the price where most options expire worthless—is around $69,000, while Ethereum’s stands at $2,500. Maximum pain points are critical in options trading as they represent levels where options holders endure the greatest potential losses. Additionally, these metrics guide traders in gauging possible market movement since they indicate where the majority of options contracts would expire out of profit.
The current put-to-call ratios for Bitcoin and Ethereum are 0.72 and 0.65, respectively, highlighting an optimistic market sentiment. A lower put-to-call ratio suggests that more traders are betting on price increases than declines, with recent market trends reflecting this sentiment. The post-election hype and speculation about potential outcomes influenced trading volumes, which surged to a record high of $10.8 billion. As interest around the election cooled, profit-taking has become more visible, with some traders winding down their positions after the election cycle.
Market watchers observed that while both Bitcoin and Ethereum enjoyed recent price gains, implied volatility is now declining. This drop is notable as implied volatility often drives options pricing. Ethereum, in particular, has managed to retain gains better than Bitcoin as the market stabilizes.
Meanwhile, the FOMC decision to lower interest rates by 0.25% is seen as a supportive move for markets. Fed Chair Jerome Powell signaled that further rate hikes are not currently planned, acknowledging that many are still experiencing the impact of elevated prices. He also stated his intention to remain in his role, aware of former President Trump's ambitions to alter US crypto regulations beyond the SEC's oversight.
With high volatility expected, large investors are strategically positioning for both year-end and early next-year market trends, anticipating further regulatory updates that could reshape the crypto landscape.
