Bitcoin Ethereum Options Expiring $3.38 Billion May Cause Market Volatility

Over $3.38 billion in Bitcoin and Ethereum options contracts are set to expire this week, potentially causing significant volatility in the cryptocurrency market. This expiration event is anticipated to serve as a pivotal moment for both assets, as traders assess potential profit-taking and risk rebalancing strategies.

Bitcoin, in particular, has approximately 25,000 options contracts with a notional value of $2.81 billion expiring. The market sentiment is slightly bearish, as indicated by a Put/Call Ratio of 1.22. The maximum pain point, the price level at which options sellers incur the least financial loss, is set at $104,000. This discrepancy creates downward pressure, as traders may intentionally or unintentionally drive Bitcoin towards this pain point, which is currently around $111,000.

A short-term pullback is possible, especially given the options pressure and the Relative Strength Index (RSI) beginning to enter overbought territory, with volume slightly tapering. A retest of the $102,000–$104,000 range, which aligns with the previous breakout zone and maximum pain level, should be expected.

Similarly, 202,000 Ethereum contracts with a total value of $570 million are set to expire. The maximum pain level is $2,450, and the put/call ratio of 1.26 suggests comparable bearish hedging. Ethereum is currently trading close to $2,680, having just emerged from a bullish pennant pattern and is near significant moving averages. Like Bitcoin, Ethereum has experienced a sharp increase and is currently in an overbought RSI range of about 74. With traders targeting $2,450 as a short-term rebalancing point, Ethereum may experience increased selling or stagnation near current levels.

Given the alignment of high Put/Call Ratios and significant gaps between the spot price and maximum pain levels, short-term volatility is likely. While the overall upward trends remain intact, this Friday’s options expiration may cause a brief cooling off or shakeout before the next rally.