TL;DR
- The expiration of Bitcoin options ($2.1 billion) and Ethereum options ($640 million) this Friday could generate high volatility in the crypto market.
- The BTC put-call ratio favors the bulls, with a ratio of 0.83, suggesting optimistic expectations for its future price.
- Ethereum faces a similar scenario, with $3,700 as a key level, as traders prepare for volatility during the holiday season.
The crypto market is gearing up for a day of high volatility due to the expiration of Bitcoin options worth approximately $2.1 billion this Friday. This event could significantly impact the cryptocurrency’s price. Additionally, the expiration of Ethereum options, which also are set to expire and total around $640 million, is adding to the potential market turbulence.
The expiration of options is a critical factor for the crypto market, as the open positions in these financial instruments can cause abrupt price movements as traders liquidate or adjust their positions. In the case of Bitcoin, the ratio between call and put options currently favors the bulls, with a ratio of 0.83, meaning that there are more call options than put options. This suggests that investors are optimistic about Bitcoin’s future price.
Investors Remain Optimistic About Bitcoin’s Future
Additionally, the “max pain” point for BTC is at $98,000, meaning that if the price of the cryptocurrency remains close to this value, many of the options would expire worthless, which could affect market expectations and cause erratic price behavior.
On the other hand, Ethereum is also in a similar situation. With $640 million in expiring options, the cryptocurrency is facing a situation similar to Bitcoin in terms of the put-call ratio. For Ethereum, $3,700 is considered the key level to determine whether the bulls or bears will dominate the market in the coming weeks.
Season of High Volatility
The expiration of these options occurs at a critical time. Traditional stock markets are also undergoing changes in their dynamics, which could influence cryptocurrency prices. Traders are adjusting their strategies and using options as a tool to protect themselves against expected volatility during the holiday season, when trading volumes tend to decrease.
The expiration of BTC and ETH options may trigger high volatility in the coming days, putting both assets‘ stability to the test in an increasingly traditional financial market-influenced environment