Bitcoin, Ethereum Options Expiring $2 Billion, Fed Decision Adds Volatility

Over $2 billion worth of Bitcoin and Ethereum options are set to expire, following two significant events—the Federal Reserve's recent decision and the Digital Asset Summit. This expiration may bring short-term turbulence, with traders closely monitoring the outcome as the contracts reach their critical “maximum pain” points.

Data from Deribit shows a large number of Bitcoin and Ethereum contracts are expiring. For Bitcoin, thousands of contracts are about to close with values aligning near the price zone where most call and put contracts lose value—what traders call the “max pain” level. Ethereum is seeing similar dynamics. Although the number of contracts expiring is lower than last week, many still hold significant weight. The put-to-call ratios for both assets remain below one, showing more traders betting on upward movement than downside protection.

The “maximum pain” levels suggest market players may push prices to these zones, making many options expire worthless. This is a known strategy in the options market, used to minimize payouts by creating price pressure toward strike zones with the most open interest. As the expiration deadline approaches, prices appear to be drifting closer to these key points.

Deribit commented publicly on the potential for either a sharp price squeeze or a slow unwinding of positions. Traders are split in their expectations. Some believe the rejection of further interest rate cuts during the Federal Reserve meeting has reduced optimism and may trigger downward pressure. Others anticipate a brief climb followed by price fluctuations before the next possible rally.

Market analysts from Greeks.live say the area just below current Bitcoin highs is critical, especially with upcoming political developments and the potential for large corporate buys. They noted the market could dip slightly before recovering at the start of next week.

Investor attention is also drawn to possible institutional involvement, with speculation about large future purchases playing a role in price expectations. This includes discussions around the US government’s strategic Bitcoin holdings, which some believe may boost long-term credibility for digital assets.

At the same time, Bitget CEO Gracy Chen shared a confident outlook. She suggested Bitcoin could hold a stable range before aiming for much higher targets later this year. Her belief centers on the idea that strategic reserves and policy shifts could improve investor trust, especially from larger institutions.

However, short-term volatility remains a major theme. Historically, large options expirations like this one often trigger temporary market movements. As contracts close and traders adjust positions, price changes can be sharp but are usually brief. Market watchers are urged to stay alert and rely on both technical indicators and sentiment data to guide decisions.

Overall, this options expiration follows a high-stakes week of regulatory news and market events. While optimism exists, the path forward may remain choppy. Investors are advised to stay focused, manage risk carefully, and prepare for shifting momentum as the market digests the impact of the expired contracts.