The cryptocurrency market is bracing for potential price fluctuations as $1.62 billion worth of Bitcoin and Ethereum options contracts expire today. This large volume of expiring options may trigger short-term price movements, impacting traders and influencing market sentiment.
Bitcoin Options Expiry
Bitcoin (BTC) options worth $1.25 billion are set to expire today. According to data from Deribit, 18,583 Bitcoin options are expiring, slightly more than last week. The current put-to-call ratio stands at 0.86, with a maximum pain point—the price where the most options expire worthless—at $64,000.
Ethereum Options Expiry
Meanwhile, Ethereum (ETH) options worth $367 million are also expiring, though the number of contracts—140,320—has decreased compared to the previous week. The put-to-call ratio for Ethereum is 0.62, and the maximum pain point is $2,500. Despite Ethereum trading at $2,617, a price well above its pain point, the expiration of these options could still drive short-term price adjustments.
Market Behavior and Price Expectations
As the expiration time approaches, it’s expected that both Bitcoin and Ethereum prices may gravitate toward their maximum pain points, a phenomenon known as the Max Pain theory. This theory suggests that options prices often converge around strike prices where the most contracts expire worthless, potentially causing a drop in value. However, after Deribit settles the contracts at 08:00 UTC on Friday, this price pressure could subside.
Market Outlook and Future Predictions
Analysts believe that the market could see a renewed push, potentially driving Bitcoin to retest its all-time high of $73,777. Although current macroeconomic conditions are not fully supportive of a major uptrend, CoinShares researchers have pointed out that the upcoming US elections are having a notable impact on market sentiment. Political developments favorable to digital assets, such as the rising support for pro-crypto parties, could boost investor confidence, leading to increased inflows and price movements.
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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.
Source: https://changelly.com/blog/bitcoin-and-ethereum-options-expiration-implications-for-price-movements/
