Traders and investors in cryptocurrencies will witness the expiration of Bitcoin (BTC) and Ethereum (ETH) options totaling approximately $3 billion today.
The expiration of options typically triggers significant price volatility, meaning that participants in the crypto market should closely monitor today’s events and possibly adjust their trading strategies around 8:00 UTC.
The expiration of Bitcoin and Ethereum options totaling $2.95 billion
Data from Deribit shows that today the expiration of 26,949 Bitcoin contracts will occur. These options have a nominal value of approximately $2.6 billion.
The maximum pain point at which the asset will cause financial losses to the largest number of holders is $91,000. At this point, most contracts will expire worthless. The put-call ratio for Bitcoin is 1.01. This indicates a bearish sentiment as investors are making more sales (puts) than purchases (calls).
In contrast, the put-call ratio for Ethereum is 0.92, indicating an overall bullish market outlook for ETH. According to Deribit, today the expiration of 184,296 Ethereum contracts will occur. These contracts have a nominal value of approximately $340.7 million and a maximum pain point of $1,800.
Ethereum has shown moderate growth of 2.27% since the opening of the session on Friday, trading at $1,848 at the time of writing. Despite the number of Bitcoin sales exceeding the number of purchases, analysts at Greeks.live note a predominantly bullish sentiment in the market. They also mention that many traders anticipate a move towards $100,000, citing low volatility and market structure.
"Key levels being monitored include $96,000 NPOC [Naked Point of Control], which has just been reached, and $94,400 VWAP [Volume-Weighted Average Price], although some express concerns about the seasonality of 'sell in May and go away'", wrote Greeks.live.
With low volatility, traders see opportunities for long positions. According to Greeks.live, market makers are selling calls with 30% implied volatility (IV) to harvest gamma, while credit leverage remains low. This indicates potential growth as traders expect further rate declines.
Gamma harvesting means selling options to profit from stable prices, managing small price movements, and earning premiums in a low-volatility market.
With ETH lagging behind BTC, some traders are taking short positions. Meanwhile, others are focused on the steady growth of BTC and are considering July positions on volatility to benefit from vega. This reflects a strategic split in the market focus.
The benefits of vega arise when option prices increase due to heightened market volatility, benefiting traders who hold options with higher sensitivity to vega.
Meanwhile, analysts at Deribit agree that some traders are focusing on the steady growth of Bitcoin. Against this backdrop, significant accumulation of BTC above $95,000 is observed.
"The market shows strong accumulation of calls on BTC above $95,000; what impact will the expiration have?" analysts at Deribit asked.
At the time of writing, Bitcoin was trading at $97,108, with an increase of nearly 3% over the past 24 hours. Therefore, significant accumulation of calls on Bitcoin above $95,000 indicates trader optimism regarding price growth.
It is worth noting that the expiration of options can cause volatility, as was the case with the expiration of $8.05 billion worth of options last week, which led to short-term price consolidation. However, volatility around the expiration of options typically decreases after the settlement of contracts around 8:00 UTC on Deribit.
#Write2Earn #BinanceSquare #Squar2earn #BinanceAlphaAlert #crypto $ETH
