Bitcoin and Ethereum Traders Brace for $3.4 Billion Options Expiry

Traders Expect Bitcoin Pullback Ahead of Expiry

Deribit data shows that the number of Bitcoin and Ethereum contracts that are expiring has increased significantly from the previous week. With a maximum pain threshold of $86,000 and a put-to-call ratio of 1.09, 28,905 options contracts pertaining to Bitcoin are about to expire.

With a predicted point of maximum pain at $3,050 and a put-call ratio of 0.66, Ethereum has 164,687 contracts that are about to expire. Divergent market sentiment, with Ethereum being optimistic and Bitcoin being pessimistic, is indicated by the difference in these ratios.

What distinguishes bullish call options and bearish put options is the put-to-call ratio. Given that traders anticipate price declines, a ratio greater than one denotes pessimism. A ratio less than one indicates optimism and the prospect of price increases.

BTC Correction Looms, ETH Holds Strong

Analysts suggest that Bitcoin’s high put-to-call ratio reflects traders hedging against a potential price dip. Ethereum, however, shows signs of resilience, buoyed by bullish sentiment and a favorable ratio.

According to options trading theory, both assets may gravitate toward their “maximum pain” points. That is $86,000 for Bitcoin and $3,050 for Ethereum — as contracts expire. This level would render the largest number of options worthless, benefiting market makers.

Market Outlook Post-Expiry

Once Deribit settles contracts at 08:00 UTC, market pressure could ease. At present, Bitcoin trades at $98,876, while Ethereum stands at $3,389. Analysts at Greeks.live predict Ethereum’s upward momentum will continue, while Bitcoin remains on the edge of a correction.

Recent inflows into ETFs, such as BlackRock’s IBIT options, coupled with a strong spot market rally, have bolstered positive market sentiment. Despite this, the looming expiration may introduce short-term turbulence for both Bitcoin and Ethereum prices.