Crypto options worth $5 billion expiry today
Today, a significant $5.01 billion in Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) options contracts are set to expire, potentially causing short-term price volatility in the crypto market.
Bitcoin options, valued at $3.67 billion, and Ethereum options, valued at $1.36 billion, make up this substantial expiration event.
As both assets have recently faced declines, traders are bracing for potential price swings.
Data from Deribit indicates a notable increase in activity compared to the previous week.
Bitcoin options set to expire today involve 61,793 contracts, a significant rise from 18,440 contracts last week.
Similarly, Ethereum’s expiring options have surged to 538,872 contracts from 141,410 contracts the previous week.
These high volumes could have significant effects on market sentiment.
For Bitcoin, the expiring options have a maximum pain price of $61,000 and a put-to-call ratio of 0.59.
Ethereum's maximum pain price is $2,800, with a put-to-call ratio of 0.49.
The maximum pain price is the level at which most options expire worthless, potentially guiding market movements.
Ratios below 1 for both assets suggest a generally bullish sentiment, with traders betting more on price increases.
Analysts at Greeks.live note that recent external factors, such as Nvidia’s earnings, have led to a slight increase in implied volatility (IV).
However, IV has generally declined over time, supported by a decrease in realized volatility (RV) for Bitcoin, which has dropped from 100% on August 9 to 40% currently.
This drop in RV has been a key factor in driving down IV, signaling a market pullback.
An increase in long positions within block options trading indicates that some large-scale traders are positioning themselves for future gains.
However, with the expiration of these crypto options contracts, traders should expect short-term price fluctuations.
While there may be initial uncertainty, markets generally stabilize once traders adjust to the new environment.
With today’s high-volume expiration, the outcome could shape future trends in the crypto market.
At the time of writing, the Bitcoin price was $59,218.10, and the Ethereum price was $2,514.33.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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