Traders and investors in the crypto market are bracing for potential volatility as over $5.26 billion in Bitcoin and Ethereum options are set to expire today. This includes $4.25 billion in Bitcoin options and $1.01 billion in Ethereum options, leaving the market closely watching the outcomes.
Price Predictions Based on Max Pain Point Theory
Deribit data shows that 62,657 Bitcoin options contracts are due to expire today, with a put-to-call ratio of 0.66 and a max pain point of $64,000. For Ethereum, 403,426 contracts are set to expire, with a put-to-call ratio of 0.97 and a max pain point of $2,600.
The put-to-call ratio serves as a key sentiment indicator in options trading. A ratio below 1 suggests bullish sentiment, while a ratio above 1 hints at bearish expectations. Currently, Bitcoin is trading at $67,962, above its max pain point, while Ethereum is at $2,490, slightly below its max pain level.
Market Analysis and Future Predictions
With Bitcoin above its max pain point, Bitcoin options holders could face losses if prices hold. Meanwhile, Ethereum’s trading below its max pain point may benefit options holders. According to Max Pain theory, option prices often converge around levels where the most contracts expire worthless, suggesting possible price shifts as expiry approaches.
As the expiration time nears, Bitcoin and Ethereum prices may gravitate towards their max pain points, with Bitcoin potentially dropping and Ethereum rising. However, after Deribit settles the contracts post-08:00 UTC on Friday, the price pressure on both BTC and ETH is expected to diminish.
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Disclaimer: Please note that the contents of this article are not financial or investing advice. The information provided in this article is the author’s opinion only and should not be considered as offering trading or investing recommendations. We do not make any warranties about the completeness, reliability and accuracy of this information. The cryptocurrency market suffers from high volatility and occasional arbitrary movements. Any investor, trader, or regular crypto users should research multiple viewpoints and be familiar with all local regulations before committing to an investment.
