After the FOMC meeting minutes and digital asset summit on Wednesday and Thursday, approximately $2.09 billion in Bitcoin (BTC) and Ethereum (ETH) options will expire today.
This expiration could impact market conditions, and investors are closely monitoring potential changes.
Options Expiry, Over $2 Billion
According to cryptocurrency derivatives exchange Deribit, $1.826 billion in Bitcoin options will expire today. The maximum pain point for these contracts is $85,000.
These options include 21,596 contracts, slightly fewer than last week's 35,176. Despite recent volatility, the put-call ratio of 0.83 indicates a generally bullish sentiment.
Ethereum has $264.46 million in options expiring, including 133,447 contracts. This is lower than last week's 223,395. The maximum pain point for these options is $2,000, with a put-call ratio of 0.62.
With options contracts expiring at 08:00 UTC today, Bitcoin and Ethereum prices are expected to approach their respective maximum pain points. According to BeInCrypto data, BTC was trading at $84,414, and ETH at $1,977.
This suggests the potential for Bitcoin and Ethereum to rise to strike prices of $85,000 and $2,000, respectively. This is possible due to smart money strategies in options trading, where prices can be pushed to "maximum pain" levels where the most call and put contracts expire worthless.
"Will we see volatility pressure or a slow resolution?" asked cryptocurrency derivatives exchange Deribit in an X (Twitter) post.
Based on the put-call ratios for Bitcoin and Ethereum being below 1, more call options (purchases) exist than put options (sales).
Market Sentiment Ahead of Today's Options Expiry
Analysts from cryptocurrency options trading tool Greeks.live provided insights into the current market sentiment, highlighting a divided trader community. On one side, some anticipate price drops after the FOMC meeting, with policymakers refusing additional rate cuts and disappointing the cryptocurrency market.
On the other hand, some expect temporary rallies before volatile conditions. Analysts point to the range between $83,000 and $85,000 as an area of interest, anticipating volatility related to Trump-related developments and potential MicroStrategy (current Strategy) purchases.
"Expect a decline and drift before rising again on Monday. We do not see the current rally as sustainable," observed Greeks.live analysts in an observation.
Elsewhere, BeInCrypto reported that Bitget exchange CEO Gracia Chen is confident BTC will maintain a range between $73,000 and $78,000, paving the way for a potential rally to $200,000. She believes the potential for U.S. strategic Bitcoin reserves will promote institutional legitimacy and long-term price stability.
While Chen is optimistic, traders and investors should prepare for short-term volatility. Historically, options expiration tends to cause temporary price fluctuations. However, the market usually stabilizes quickly.
This requires vigilance and analysis of technical indicators and market sentiment to effectively manage potential volatility.
