A substantial volume of Bitcoin (BTC) and Ethereum (ETH) options contracts expire today, encompassing 118,000 BTC options and 1.11 million ETH options, with a total notional value of $5 billion.

Market sentiment is balanced, with a Put Call Ratio of 0.58 for BTC and 0.46 for ETH, suggesting bearish and bullish traders are evenly split. The max pain point, or the price at which the most options would expire worthless, is $26,500 for BTC and $1650 for ETH.

The third quarter is typically less active in cryptocurrency markets, with lower options volumes and market liquidity. Larger positions have driven the market leading up to this quarterly expiration. Implied volatility, a measure of expected price fluctuations, continues to decline, indicating reduced expectations for significant price movements.

The impending expiration of these contracts could lead to notable price changes, although the balanced sentiment among traders may moderate potential volatility. The ongoing trend of decreasing liquidity and implied volatility suggests that larger positions have influenced the market dynamics in the run-up to this significant quarterly expiration.

These expirations could also impact broader market sentiment and trading strategies in the short term. With such a significant amount of capital tied up in these soon-to-expire contracts, the outcome could set the tone for trading activity and market sentiment moving into the fourth quarter of 2023.