With Bitcoin options totaling $5.8 billion in face value and Ethereum options worth $1.9 billion, traders are closely monitoring their potential impact on the price.
A powerful market after the expiration of Bitcoin and Ethereum options?
According to Deribit data, 89,037 Bitcoin options contracts will expire on September 27. This share turns out to be significantly higher than that of last week which amounted to 20,037 contracts. These contracts have a put-to-call ratio of 0.64 and a maximum pain point of $59,000.
Similarly, the Ethereum options market is set to expire with 719,130 contracts. Ethereum contracts expiring today have a put-to-call ratio of 0.47, with a maximum pain point of $2,550.
Learn more: The safest crypto platforms to trade your assets.
In options trading, traders analyze ratios of puts to calls to gauge market sentiment. The ratio of puts to calls for Bitcoin thus indicates a relatively balanced market with a slight preference for call options, suggesting more bullish expectations. At the same time, Ethereum’s ratio of puts to calls reflects even more bullish sentiment among traders.
The maximum pain point suggests that Bitcoin and Ethereum prices could stabilize around these critical levels as options expire, causing losses for both bulls and bears. Finally, as these options settle, they could generate volatility, with the possibility of sudden price changes depending on market reaction.
Separately, Greeks.live analysts provided additional insight into expiring options, noting the influence of general market trends.
“Today is Q3 delivery day, and the crypto has been rising sharply over the past three weeks, fueled by the Fed’s 50 basis point rate cut, which has significantly boosted market confidence. With the end of the quarter, and in light of previous years, the fourth quarter is generally favorable, especially with the US election and two more rate cuts on the horizon,” they wrote.
Bitcoin’s price has risen almost constantly since the Federal Reserve cut rates on September 18. Indeed, following this, BTC rose from $57,000 to $65,075, while the price of Ethereum rose from $2,278 to $2,625. Analysts expect continued market volatility as traders reposition for the fourth quarter, traditionally a strong period for crypto assets.
Despite the positive momentum, traders are advised to remain cautious. Indeed, according to historical data, option expiration often leads to short-term instability in the market.
Learn more: Forecast for Bitcoin price in 2024/2025/2030
The next few days will be crucial in determining whether Bitcoin and Ethereum can maintain their uptrends or whether a correction period is imminent. With expected market volatility, the price reaction following this significant options expiration could set the tone for the weeks to come.
Moral of the story: A crypto option that expires is a trader that doesn’t sleep.
Disclaimer
Disclaimer: In accordance with The Trust Project guidelines, BeInCrypto is committed to providing unbiased and transparent information. This article aims to provide accurate and relevant information. However, we encourage readers to verify the facts on their own and consult a professional before making any decision based on this content.
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