Bitcoin and Ethereum options contracts worth $820 million set to expire

Today marks the expiration of a substantial number of Bitcoin and Ethereum options contracts in the cryptocurrency market. Specifically, there are approximately 22,000 Bitcoin options contracts expiring, with a combined notional value of $590 million. In parallel, around 147,000 Ethereum options contracts, with a notional value of $230 million, are set to reach their expiration.

For this batch of Bitcoin contracts, the ‘max pain point,’ which signifies the price level where the largest number of open contracts exists and where the most significant losses will occur upon expiration, is $26,500. The current spot prices closely align with this figure, hovering at approximately $26,660. The put/call ratio for these contracts stands at 1, indicating a balance between long and short positions.

There has been an observed increase in put positions during this week due to deteriorating market liquidity conditions. However, it’s speculated that the expiration of today’s Bitcoin options may not exert significant influence on market trends. Bitcoin’s price has experienced a slight decline from its Monday peak of $27,400 and is currently down by 2.6% to $26,664. It remains slightly above the support level at $26,500, but further declines could risk breaking below the $26,000 price level.

In contrast to Bitcoin’s notable price movement over the past week, Ethereum’s price has remained relatively stable. The expiring Ethereum contracts have a max pain point of $1,600, and the put/call ratio of 0.94 indicates a nearly even distribution between sellers of long and short contracts.

Notably, the implied volatility (IV), which serves as an indicator of expected future volatility based on expiring derivatives contracts, is higher for Bitcoin compared to Ethereum. This suggests that traders anticipate more significant price swings for Bitcoin in the near future.