Over $2.6 Billion Worth of Bitcoin & Ethereum Options Expire Today

The cryptocurrency market will witness the expiration of $2.62 billion in Bitcoin and Ethereum options contracts today. The large number of expiring options contracts may impact short-term price action, especially as both assets have recently declined. With $2.02 billion in Bitcoin (BTC) options and $598.99 million in Ethereum (ETH) options, traders are preparing for potential volatility. Also Read: Crypto Market Capitalization Drops 10% Since Fed Rate Hike Over $2.6 Billion in Options Expiring The options expiring today mark a slight decrease from last week. According to data from Deribit, the expiration of Bitcoin options involves 20,728 contracts, compared to 20,815 contracts the previous week. Similarly, the expiring Ethereum options total 174,863 contracts, up from 164,330 contracts the week prior. For Bitcoin, the expiring options have a max pain point of $110,000 and a Put-to-Call ratio of 0.87. This suggests an optimistic sentiment despite the asset's recent decline. In comparison, the Ethereum options have a max pain point of $3,700 and a Put-to-Call ratio of 0.48, reflecting a similar market outlook. The max pain point is an important metric that often guides market behavior. It represents the price level at which the majority of expiring options are out of the money. Additionally, the Put-to-Call ratios below 1 for both Bitcoin and Ethereum indicate optimism in the market, with many traders betting on price increases. However, with such large volumes of options expiring, traders and investors should prepare for potential volatility. "Option expiration can lead to increased volatility as traders adjust their positions. Keep an eye on potential moves in SPX and BTC as they may react to these market dynamics," a user on X shared. Can Options Expiration Spur Market Recovery? Notably, this options expiration comes after Bitcoin dropped to $94,235. At the time of writing, the leading cryptocurrency is trading at $97,157, down nearly 4% since Friday's open. With a max pain point of $101,000, Bitcoin is currently trading below its strike price. In contrast, Ethereum is trading at $3,392, well above its max pain point of $3,700. Based on the max pain theory, BTC and ETH prices are likely to gravitate towards their respective strike prices, suggesting potential volatility. This occurs because the max pain theory in options trading assumes that the option writers, typically large institutions or professional traders, have the resources and market influence to push the closing price towards the maximum pain level on the expiration date. For Bitcoin, this could mean the potential for a recovery, potentially reclaiming the $100,000 mark. "Overnight trading sessions don't look good. The saving grace may be that there are just so many worthless options expiring tomorrow," a user on X joked. However, it's important to note that while options expiration often causes short-term price volatility, the market typically stabilizes soon after as traders adapt to the new price environment. With the large volume expiring today, traders and investors may expect a similar outcome, potentially impacting the overall cryptocurrency market trend, especially towards the end of the week. Join the BeInCrypto community on Telegram to stay updated on the latest analysis, news, and insights in the financial markets, including the cryptocurrency space.