Bitcoin and Ethereum Options: $5.79 Billion Set to Expire, Sparking Volatility

Bitcoin and Ethereum options worth a combined $5.79 billion are set to expire today, potentially introducing volatility to the market as traders eye key pain points. The expiring options have a notional value of $4.68 billion for Bitcoin and $1.11 billion for Ethereum, with maximum pain points at $96,000 and $3,000, respectively.

Deribit data reveals that the put-to-call ratio for expiring Bitcoin options is 0.71, indicating a prevalence of purchase options (calls) over sales options (puts). The maximum pain point for these options is $96,000, which is the price at which the asset will cause the greatest number of holders' financial losses. Expiring Ethereum options have a notional value of $1.109 billion, a put-to-call ratio of 0.52, and a maximum pain point of $3,000.

Market makers and traders are bracing for increased volatility as the market faces concerns over potential downside. Some traders are repositioning to call ratio spreads as a more defensive strategy, anticipating choppy price action and a potential retest of key support levels. Deribit states that traders are hedging against declining crypto prices, with the potential for prices to gravitate toward max pain levels.

As of this writing, Bitcoin traded for $79,890, and ETH exchanged hands for $2,137. The max pain prices for both Bitcoin and Ethereum are well above their respective market values, which could incentivize options sellers to push prices higher closer to the pain level. Traders should monitor key support and resistance levels for both Bitcoin and Ethereum as the market navigates the complexities of these expiring options and reacts to global economic events.