Massive Options Expiry Looms: Bitcoin and Ethereum Markets Brace for Potential Volatility

The cryptocurrency market is on edge as a significant options expiry event for both Bitcoin and Ethereum approaches. With billions of dollars in contracts set to expire, traders are anticipating potential market swings and increased volatility in the coming days. This event follows recent selling pressure observed in Bitcoin and altcoins after the latest FOMC meeting.

Key Takeaways

• A substantial volume of Bitcoin and Ethereum options, totaling approximately $16 billion, is scheduled for expiry on October 31.

• Bitcoin's price has recently dipped below $110,000, with institutional sentiment showing a negative trend as indicated by ETF inflows.

• Ethereum has also experienced a price decline, falling below the $4,000 mark.

• Market sentiment for both Bitcoin and Ethereum appears mildly bullish based on put-to-call ratios, though some traders are hedging against downside risks.

Bitcoin Market Dynamics

Bitcoin has seen considerable price action, fluctuating between highs around $116,000 and lows near $106,000. The recent downturn in spot Bitcoin ETF inflows suggests a cooling of institutional interest. Data from Deribit indicates that over 124,000 Bitcoin options contracts, valued at approximately $13.59 billion, are due to expire. The put-to-call ratio stands at 0.70, pointing towards a slightly bullish outlook among traders, with a higher number of call options open compared to put options. The calculated max pain point for Bitcoin is $114,000, a level that historically influences price action around expiry. However, Bitcoin must first overcome the key resistance level identified at $112,340 to initiate a significant upward movement.

Ethereum Faces Expiry Pressure

Ethereum's price has also succumbed to selling pressure, trading below $4,000. Approximately 646,902 Ethereum options contracts, worth around $2.49 billion, are set to expire. The max pain level for ETH is positioned at $4,100, just above its current trading price. Similar to Bitcoin, Ethereum's put-to-call ratio is 0.70, suggesting a mildly bullish sentiment. Despite this, Deribit's data reveals a more cautious approach from traders, with call open interest significantly outweighing put open interest. This indicates that while many are positioned for potential gains, a notable portion of traders are also implementing strategies to mitigate potential losses from a price drop.

Sources

• Bitcoin and Ethereum Options Worth $16 Billion Set to Expire, Could Trigger Market Turbulence, Bitget.