The crypto market is bracing for potential volatility as approximately $7.7 billion in crypto options expire today, affecting both Bitcoin and Ethereum.
With Bitcoin options amounting to $5.8 billion in notional value and Ethereum options reaching $1.9 billion, traders are closely watching the expiration for its potential impact on crypto prices.
Market Insights: The Aftermath of Crypto Options Expiry
According to data from Deribit, a staggering 89,037 Bitcoin options contracts will expire today, significantly more than last week’s 20,037 contracts. The contracts have a put-to-call ratio of 0.64 and a maximum pain point of $59,000.
Similarly, Ethereum options totaling 719,130 contracts are set to expire today. These Ethereum contracts have a put-to-call ratio of 0.47 and a maximum pain point of $2,550.
Market Predictions for the Coming Weeks
Traders often examine put-to-call ratios for insights into market sentiment. Bitcoin’s current ratio points to a balanced market with a slight bias towards call options, possibly hinting at a bullish outlook. On the other hand, Ethereum’s ratio suggests even stronger bullish sentiment among traders.
The maximum pain point helps predict that Bitcoin and Ethereum prices may hover around key levels as the options expire, often causing financial pain to both bulls and bears. These expirations could spark substantial market volatility, leading to sudden price movements.
Analysts from Greeks.live have shared valuable insights, highlighting how broader market trends influence these expirations.
“Today marks the third quarter delivery day. The crypto market has surged over the past three weeks, driven by the Fed’s 50 bps rate cut, which has significantly bolstered market confidence. As the quarter wraps up, history suggests a favorable fourth quarter, particularly with an upcoming US election and two more expected rate cuts,” they wrote.
Since the Federal Reserve’s rate cut on September 18, Bitcoin’s price has climbed from $57,000 to $65,075, while Ethereum saw gains from $2,278 to $2,625. Analysts predict continued volatility as traders adjust their positions for the fourth quarter, traditionally strong for crypto assets.
Despite the positive momentum, cautious trading is advised. Historically, options expirations can lead to short-term market instability.
The upcoming days will be critical in determining whether Bitcoin and Ethereum can sustain their bullish trends or face a potential correction. Market volatility is expected, and how prices react post-expiration may set the tone for upcoming weeks.
Read more: An Introduction to Crypto Options Trading
Read more: 9 Best Crypto Options Trading Platforms
For those looking to refine their trading strategies during these volatile times, Click Here For More Trading tips and strategies.
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