The crypto market is on edge today as over $2.2 billion worth of Bitcoin (BTC) and Ethereum (ETH) options contracts are set to expire. This significant event has the potential to trigger temporary turbulence, raising questions about its impact on the prices of the two leading cryptocurrencies.
Options Expiration: A Potential Catalyst for Volatility
Approximately $1.24 billion in Bitcoin options and $984 million in Ethereum(ETH) options are nearing their expiry date. Depending on how traders react to this event, it could lead to a surge in selling activity or a wave of buying pressure.
Analysts at Greeks.Live, a provider of crypto option trading tools, offer a cautiously optimistic outlook. They point to recent interest rate cuts by the Bank of Canada and the European Central Bank as positive signs for Bitcoin’s strength, potentially mitigating the impact of the expiry.
Data Points to Watch: Put-to-Call Ratio and Maximum Pain Points
Deribit data reveals that 17,609 Bitcoin(BTC) contracts are expiring, with a put-to-call ratio of 0.67. This ratio indicates a higher number of call options (bullish bets) compared to put options (bearish bets). Further, Bitcoin’s “maximum pain point” sits around $70,000. This price represents the level at which the most significant financial losses would be incurred by options holders, potentially influencing price action.
Similarly, in the Ethereum market, 259,641 contracts are due to expire with a put-to-call ratio of 0.64, mirroring a slight bullish sentiment. Ethereum’s maximum pain point is $3,650, and could act as a price magnet in the short term.
Volatility Expected, But Stabilization Likely to Follow
While options expirations can cause temporary fluctuations, historical trends suggest the market often stabilizes afterwards. Traders are advised to stay vigilant, monitor technical indicators, and gauge market sentiment to navigate the anticipated volatility effectively.
Market Poised for the Weekend
As the week draws to a close, both Bitcoin and Ethereum(ETH) have demonstrated resilience. Bitcoin(BTC) recently touched a two-month high of $71,713 before experiencing a slight pullback. Meanwhile, Ethereum is holding steady around $3,805 with minor price fluctuations. All eyes are now on how these leading cryptocurrencies will react to the options expiry and navigate the weekend ahead.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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