Bitcoin, Ethereum Options Expiry Triggers $2.2 Billion Event Amid Market Uncertainty
1min read On Good Friday, April 18, a significant event unfolded in the cryptocurrency market as over $2.2 billion worth of Bitcoin and Ethereum options contracts expired. This event occurred amidst ongoing macroeconomic uncertainty, with President Donald Trump pressuring the Federal Reserve to cut interest rates, although the Fed chair, Jerome Powell, remained steadfast in his position.
According to data from Deribit, 23,221 Bitcoin options contracts with a notional value of $1.966 billion were set to expire. The put/call ratio for these contracts was 0.96, indicating a higher prevalence of call options over put options. The maximum pain point, or the strike price at which the greatest number of holders would incur financial losses, was set at $82,000 for Bitcoin.
Similarly, 177,130 Ethereum options contracts with a notional value of $279.789 million were also set to expire. The put-to-call ratio for Ethereum options was 0.84, with a maximum pain point of $1,600. This week's options expiry event was slightly smaller than the previous week, which saw approximately $2.5 billion worth of BTC and ETH options expire, with short-term dips bringing put demand.
Traders and investors were advised to closely monitor the developments as options expiry could lead to price volatility. However, put-to-call ratios below 1 for both Bitcoin and Ethereum in options trading indicated market optimism, suggesting that more traders were betting on price increases. Analysts highlighted low volatility and flat skew, which typically suggests a calm market. However, historical data from coinglass indicated that post-expiry price swings are common, potentially signaling an upcoming move.
Analysts at Greeks.live echoed the calm outlook but noted that the market was predominantly bearish to neutral. Traders expected continued choppy action before potentially revisiting the $80,000 to $82,000 range. As of the time of writing, Bitcoin was trading at $84,648, slightly above its strike price of $82,000. According to the Max Pain theory, prices were likely to move toward this strike price as options neared expiry.
Greeks.live analysts attributed the mild sentiment to a lack of significant news from Trump this week. However, they anticipated more trade wars, heightened uncertainty, and volatility. They also cited Powell’s comments, which created downward pressure as 100 basis points rate cut expectations for the year were reduced, leading to crypto correlation with traditional markets. Greeks.live warned of a higher probability of a black swan event, where a rare, unexpected event could have a significant and disruptive impact on the market. They urged traders to buy out-of-the-money put options, which have no intrinsic value but potential time value.
