Markets
$2.2 Billion Crypto Options Expire as Macroeconomic Data Looms
The cryptocurrency market is bracing for potential temporary turbulence, with more than $2.2 billion in Bitcoin (BTC) and Ethereum (ETH) options set to expire today.
Expiration can cause more volatility on the market and will it influence the price of the two main cryptocurrencies?
Examining the upcoming options expiration for Bitcoin and Ethereum
Approximately $1.24 billion in Bitcoin options contracts and $984 million in Ethereum options contracts are about to expire. Depending on how traders react to the event, it could trigger the expiration of these options contracts a new wave of sell-offs or buying pressure.
According to data from Deribit, 17,609 Bitcoin contracts will expire, with a put-to-call ratio of 0.67. This ratio suggests a prevalence of purchase (call) options over sales (put) options.
To know more: An introduction to crypto options trading
Bitcoin options expiring. Source: Deribit
Meanwhile, Bitcoin’s critical high point is around $70,000. The maximum tipping point is the price level at which the asset will cause financial losses to the greatest number of holders.
This was suggested by analysts at crypto options trading tools provider, Greeks.Live a positive outlook for Bitcoin and Ethereum prices despite the impending options expiration. They explained that the cryptocurrency market, especially Bitcoin, showed signs of strength following the announcement of interest rate cuts by the Bank of Canada (BOC) and the European Central Bank (ECB).
“Nonfarm payrolls and the unemployment rate in the United States have also become more attractive The Fed rate cut expectations now at the center of macro trading. Short term [implied volatility] IV is now sharply increasing, with the weekly [at-the-money] ATM IV returns above 50% but still below 50% at the end of the week, just as traders bet [today’s] data will beat expectations, with slightly stronger bullish forces,” they said noticed.
In the Ethereum market, 259,641 contracts will expire. The put-to-call ratio is 0.64. Ethereum’s maximum critical point is $3,650.
To know more: 9 Best Crypto Options Trading Platforms
While options expiration can cause temporary market disruption, it is often followed by stabilization. Traders should remain vigilant, analyzing technical indicators and market sentiment to effectively address expected volatility.
As the week concluded, Bitcoin and Ethereum showed resilience. Bitcoin hit a two-month high of $71,713 before retreating slightly. On the other hand, Ethereum is trading at $3,805, after experiencing a slight decline.
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