Crypto Options Expiry: $22.6B BTC, $2.8B ETH Set to Expire Amid Market Volatility

On April 11, an analyst shared significant insights regarding the expiration of cryptocurrency options, noting that approximately 28,000 BTC options are set to expire, with a Put Call Ratio of 0.88. The maximum pain point, which is the price level where the most options are set to expire worthless, is positioned at $81,500, representing a significant notional value of $22.6 billion. Additionally, 184,000 ETH options are also expiring, maintaining a Put Call Ratio of 0.92 and a maximum pain point at $1,700, equating to $2.8 billion in notional value.

Market sentiment has shifted to a more fearful stance this week, heavily influenced by the fluctuating tariff policies, which have exacerbated risk aversion among traders. Market volatility is expected to continue in the near term, driven by prevailing uncertainties surrounding ongoing trade disputes. Currently, the open interest in cryptocurrency options reflects over 1% of the total open interest, with the June quarterly options commanding the largest proportion. Interestingly, BTC’s implied volatility (IV) has seen a notable decrease, hovering around 50% across various maturities. In contrast, ETH’s IV remains comparatively robust at about 80% for short to medium-term options, indicating that selling ETH options might be wise given the circumstances. Overall, a persistent lack of fresh capital inflows, coupled with subdued investor sentiment, suggests the potential for unforeseen market disruptions.

The recent market volatility has been influenced by various factors, including the tariff policies and the subsequent market reactions. The decision to pause tariffs for 90 days, following the initial imposition of sweeping tariffs, has led to a trade showdown. This decision followed market volatility and has contributed to the overall risk aversion among traders. The market chaos has also caused investors to dump Bitcoin ETFs, indicating a significant shift in investor sentiment.

The cryptocurrency markets have experienced a dip following the establishment of a strategic bitcoin reserve. This event has added to the overall market volatility, as investors react to the changing landscape of cryptocurrency regulations and policies. The at-the-money volatility for BTC and ETH continues to drop across all tenors, with ETH 7-day tenor options maintaining a 50% volatility premium. This indicates that while there is still some volatility in the market, it is not as high as it was previously. The core inflation and other economic factors also play a role in the overall market sentiment, contributing to the current state of market volatility.