A large number of Bitcoin (BTC) options are expiring soon. Let's figure out how this will affect the price of the underlying asset.
Bitcoin options are derivative contracts that allow traders to buy or sell BTC at a specific price on a specific expiration date. If the owner of the option decides not to buy or sell the asset, he is not obligated to do so. This makes options more flexible than futures, which require you to close your position regardless of profit or loss.
The notional value of the 30,500 Bitcoin contracts expiring soon is $930 million. While this is much less than the value of Ethereum (ETH) options, which exceed $4 billion, their expiration could still trigger increased volatility in the market.
Metrics give a neutral forecast
According to Greeks.live, the put to call ratio on BTC is 0.99. This metric is calculated by dividing the number of put options (short) by the number of call option contracts (long). A value below 1 is considered bullish—so options are fairly evenly split between bulls and bears at this point.
The maximum pain point is at $29,000. This is the price of Bitcoin at which the asset will cause financial losses to the largest number of holders.
What's happening to the price of Bitcoin
The crypto market capitalization is at its highest level since May 2022 and amounts to $1.33 trillion. The price of Bitcoin has increased by 2.3% over the past 24 hours; at the time of writing, the main cryptocurrency is trading at $30,841.
#Neutral option odds indicate that their expiration will not have a strong impact on the markets. However, with BTC hitting an 11-month high, the possibility of a correction should not be overlooked.
