This Friday, the cryptocurrency market is witnessing the expiration of a significant number of and options contracts. The Bitcoin options contracts expiring today encompass around 22,000 units, with a notional value of $590 million. Concurrently, about 147,000 Ethereum options contracts, carrying a notional value of $230 million, are also set to expire.
The ‘max pain point’, the price level at which the most open contracts exist and where the highest losses will occur upon expiration, for this batch of Bitcoin contracts is $26,500. The current spot prices closely mirror this figure, hovering around $26,660. The put/call ratio for these contracts stands at 1, indicating an equal balance between long and short positions.
Market observers have noted an increase in put positions this week due to worsening market liquidity conditions. However, it is speculated that the expiration of today’s Bitcoin options might not significantly influence market trends. Bitcoin’s price has seen a slight dip since its Monday high of $27,400 and is currently down by 2.6% to $26,664. The price is just above the support level at $26,500; however, further declines could risk falling below the $26,000 price level.
In comparison to Bitcoin’s noticeable price movement over the past week, Ethereum’s price has remained relatively stable. The expiring Ethereum contracts have a max pain point of $1,600 with a put/call ratio of 0.94 suggesting a nearly even distribution between long and short contract sellers.
The implied volatility (IV), an indicator of expected future volatility derived from expiring derivatives contracts, is higher for Bitcoin than Ethereum. This suggests that traders anticipate more pronounced price swings for Bitcoin in the near future.
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