- The cryptocurrency market is on edge as Bitcoin and Ethereum options worth $2.06 billion are set to expire today, potentially leading to increased market volatility.
- Bitcoin faces the expiry of 20,276 contracts worth $1.35 billion, while Ethereum grapples with 201,647 contracts valued at $709.76 million, amidst recent price drops and bullish sentiment indicators.
The crypto market is preparing for what could be a seismic event as Bitcoin and Ethereum options, with a staggering notional value of $2.06 billion, are set to expire today. This expiration event is poised to inject substantial volatility into the market, potentially impacting the prices of BTC and Ether.
According to recent data, a total of 20,276 Bitcoin options contracts, valued at approximately $1.35 billion, are scheduled to expire. Among these contracts, there is a notable concentration at a maximum strike price of $68,500, indicating potential market sentiment towards higher price expectations.
Simultaneously, Ethereum is facing the expiration of 201,647 contracts worth $709.76 million, with a significant number of contracts having a maximum strike price of $3,600. This suggests that Ethereum’s market participants are also anticipating potential price movements around this level.
The put/call ratios, which are indicators of the balance between outstanding buy and sell options, stand at 0.49 for Bitcoin and 0.36 for Ethereum. Ratios below 1 typically suggest a higher concentration of long positions compared to short positions, signaling a bullish sentiment among market participants. However, such imbalances can also amplify market volatility, particularly around the time of option expirations.
Adam, a macro researcher at Greeks.Live, a prominent options trading tool, emphasized the significance of this expiration. He noted that while the week has been pivotal for macroeconomics, the crypto market has recently faced challenges, with major cryptocurrencies and altcoins experiencing significant declines.
Adam further highlighted that the implied volatilities of Bitcoin and Ethereum are presently at relatively low levels, which makes purchasing options potentially cost-effective. He suggested that traders be prepared for the possibility of an Ethereum Spot ETF approval by the end of the month, urging them to consider options for the upcoming month accordingly.
Leading up to this major expiration, Bitcoin has seen its price drop from $71,643 on June 7 to $66,254 on June 11, before recovering to $69,945 on June 12. As of the latest update, Bitcoin is trading at $67,064, reflecting a 6% decline over the past week. Ethereum has similarly fallen by 7.8%, currently trading at $3,519.
Given the substantial amount of options set to expire today and the recent price movements of Bitcoin and Ethereum, the market is on high alert for potential volatility. Savvy investors and traders are advised to remain cautious and monitor developments closely, as such events often precede sharp market movements.
Market Sentiment and Potential Impacts
As market participants brace for potential volatility, the outcome of today’s options expiry could dictate short-term trends for Bitcoin and Ethereum. The combination of high option volume and recent price declines sets the stage for a potentially turbulent trading session. Investors are urged to stay informed and exercise caution during this critical period in the crypto market.
