SUMMARY
- Bitcoin’s $4.2 billion and Ether’s $1 billion options will expire on Friday at 08:00 UTC.
- A higher put/call ratio for Bitcoin suggests stronger bullish sentiment compared to Ether ahead of the expiry.
Bitcoin (BTC) and Ether (ETH) options worth $4.2 billion and $1 billion, respectively, are set to expire this Friday at 08:00 UTC on Deribit, activating potential market volatility. Options allow holders the right to purchase or sell an asset at a set price within a particular period, and market participants frequently alter positions as expiry nears. Around $682 million of BTC options, or 16.3% of the total, are currently “in-the-money” (ITM), primarily calls, hinting at noteworthy repositioning in the market.
BTC’s open interest put-to-call ratio stands at 0.62, reflecting bullish sentiment as more call options dominate. The max pain level—where most options would expire worthless—sits at $64,000, maximizing profit for writers and loss for buyers. As of now, BTC trades at $67,000, proposing potential downward development toward the max pain price. On the other hand, Ether (ETH) is trading closer to its max pain level of $2,600, demonstrating a limited downside ahead of expiry.
The max pain theory states that pre-expiry market dynamics regularly push prices toward these levels as traders with short positions attempt to minimize losses. Be that as it may, opinions are divided on how much impact the options market exerts on spot prices. Despite the developing significance of options, a few analysts contend that its size remains generally little to definitively shift BTC’s spot price.
The options market has expanded quickly over the past few years, with billions of dollars in contracts expiring monthly and quarterly. Glassnode information shows spot trading volumes for BTC were around $8.2 billion on Friday, whereas options volume totaled roughly $1.8 billion. Even though options open interest has developed, it still makes up a small portion of the broader crypto market. The $4.2 billion in BTC options due to expire this week account for less than 1% of Bitcoin’s total market cap, which right now stands at $1.36 trillion.
With no major catalysts anticipated this week, traders are bracing for more volatility. BTC and ETH are still floating below key resistance levels, with BTC needing to break past $70,000 and ETH confronting resistance at $2,800. Until these levels are cleared, the market might stay choppy, and traders will observe closely to see if max pain levels play a part in deciding price activity by the end of the week.