Bitcoin
Bitcoin and Ethereum Face $2 Billion Options Expiration
The crypto market prepares for volatility as approximately $2.06 billion worth of Bitcoin (BTC) and Ethereum (ETH) options will expire today.
How will expiring options impact market dynamics, with notable data highlighting the significant risks involved?
Key insights into current Bitcoin and Ethereum options expiration
Approximately 20,276 Bitcoin options contracts will expire today. These contracts have a notional value of US$1.35 billion, with a put-to-call ratio of 0.49. In the context of crypto options trading, this ratio suggests a prevalence of call options over put options.
See more information: An Introduction to Crypto Options Trading
Bitcoin options expiring. Source: Debt
These expired Bitcoin options have a maximum pain point of $68,500. This represents the price level where the greatest financial losses will be suffered by option holders, marking critical limits for market participants.
Additionally, 201,647 Ethereum contracts will expire at the same time. According to Deribit data, the notional value of these contracts is $709.76 million, with a maximum pain point of $3,600. The data also shows that the put ratio for these options is 0.36.
Adam, macro researcher at options trading tool Greeks.Live, shared insights into Bitcoin and Ethereum contracts expiring today. He emphasized the macroeconomic importance of the week.
“This week is a big week for macroeconomics. Economic data is relatively favorable for the venture capital market. The US stock market rose significantly, but the crypto market performed poorly. Conventional currencies fell across the board and altcoins fell further. There are fewer hot spots in the market recently and the market is relatively calm,” he noted.
He further explained the volatility and possible strategic moves for traders.
“Currently, BTC’s key medium- and short-term implied volatilities are all below 50%, and the key medium- and short-term implied volatilities [implied volatilities] ETH IVs are all below 60%. Both have fallen to relatively low levels, providing buyers with high value for money. There must be new news about the approval of [spot] ETH [exchange-traded fund] ETF at the end of this month so you can plan ahead for next month’s purchasing options,” suggested Adam.
Bitcoin and Ethereum faced price drops leading to this expiration. Bitcoin, which traded at $71,643 on June 7, briefly fell to $66,254 on June 11. before recovering to $69,945 on June 12.
Bitcoin currently trades at $67,064, reflecting a 6% drop over the past week. Meanwhile, Ethereum is trading at $3,519, marking a 7.8% drop.
See more information: 9 Best Crypto Options Trading Platforms
Although option expiries can cause temporary market disruptions, they are often followed by stabilization. Traders must remain vigilant, analyzing technical indicators and market sentiment to effectively navigate predicted volatility.
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