Today, $1.62 billion worth of Bitcoin and Ethereum options contracts will expire in the cryptocurrency market. This option volume is expected to cause short-term price fluctuations and thus affect investors' profitability. Bitcoin options that expire are worth $1.25 billion, while Ethereum options have a volume of $367 million. Here are the details…
Prepare for Fluctuations!
There were promising developments for the cryptocurrency market this week, but it is uncertain whether this positive atmosphere will continue. According to data from Deribit, 18,583 Bitcoin options will expire today, slightly more than the 18,271 contracts that were redeemed last week. The put/call ratio of the options expiring today is 0.86, and the maximum pain point is set at $64,000.
At the same time, 140,320 Ethereum options contracts are set to expire today, significantly less than the previous week. These contracts will expire with a put/call ratio of 0.62 and a maximum pain point of $2,500.
This data suggests an overall bearish trend for both contracts, with Bitcoin currently trading above its maximum pain point at $67,661, while Ethereum is trading well above its strike price at $2,617.
Expert Opinions and Expectations
Experts expect cryptocurrency prices to approach their maximum pain points as the expiration date of option contracts approaches. This is where smart money tends to push prices. This could mean that BTC and ETH values could fall. This approach is based on the Maximum Pain Theory, where option prices will center around strike prices where the largest number of contracts (both calls and puts) expire worthless.
This strategy results in option buyers losing the most value, thus increasing bearish sentiment. However, the pressure on BTC and ETH prices may ease after 11:00 UTC when Deribit closes the contracts.
Macroeconomic Situation and Future Prospects
Analysts say Bitcoin and the broader market are looking for a strong push that could propel the leading cryptocurrency above its all-time high of $73,777. From a macroeconomic perspective, there are no positive tailwinds, but CoinShares researchers say the US elections remain the primary driver of current market sentiment. In this context, analysts say:
“…investor decisions are likely to be more heavily influenced by the upcoming US elections. This is becoming more apparent as stronger-than-expected economic data dampens the blow. Additionally, the recent US vice presidential debate and the shift in polls towards Republicans in favor of digital assets have led to a spike in inflows and prices.”
