The crypto market is preparing for significant moves as over $3 billion in Bitcoin and Ethereum options expire today.
Considering significant contracts and established maximum pain points, how will these option expirations impact market volatility?
Crypto markets are preparing for a $3 billion options expiration.
According to Deribit, today approximately $2.65 billion in Bitcoin options are expiring. The maximum pain point for these options is $94,000, accompanied by a put-call ratio of 1.05.
This expiration includes 25,925 contracts, slightly fewer than last week when there were 26,949 contracts. Ethereum is also witnessing the expiration of 164,591 contracts, which is less than last week when open interest was 184,296. These contract expirations have a nominal value of $364.06 million. The maximum pain point for these contracts is $1,850, with a put-call ratio of 1.43. Given that Bitcoin and Ethereum sales exceed buying calls, analysts at Greeks.live note a predominantly bearish sentiment in the market.
"The group seems to lean towards a bearish sentiment, with traders positioning for potential downward movements," wrote Greeks.live.
For Bitcoin, this sentiment becomes more apparent as its maximum pain level is significantly lower than the current price of $102,570. According to the maximum pain theory, prices tend to gravitate towards these strike prices as options approach expiration.
Based on this, analysts at Greeks.live note that some traders are watching Bitcoin price levels from $93,000 to $99,000. They also remark on the lack of enthusiasm for BTC breaking beyond $100,000.
"The market is described as dull, with traders attempting to capitalize on time decay while maintaining bearish exposure," analysts added.
Positioning leans towards a bearish sentiment, with maximum pain below the price.
Meanwhile, with a put-call ratio above one for both Bitcoin and Ethereum, there are more put options (bearish bets) than call options (bullish bets). More traders are betting on price declines.
The histograms in the images above confirm this. The chart of BTC open interest shows a significant concentration of option contracts at strike prices below the current BTC price of $102,570, particularly between $93,000 and $100,000.
This accumulation of option contracts at lower strikes indicates that traders are positioning for a potential price decline, hence the bearish tilt.
This comes amid expectations of volatile weekends that could threaten Bitcoin's growth potential. As reported by BeInCrypto, representatives from China and the U.S. will meet in Switzerland over the weekend for trade negotiations.
However, concerns arise over the risk of a breakdown in tariff negotiations. This meeting will be the first official trade talks since President Trump raised tariffs on Chinese imports to 145%.
However, Treasury Secretary Scott Bessent stated that the U.S. is not seeking a break. Meanwhile, in a Thursday statement, the Chinese embassy in Washington said it would not allow any attempts to pressure or coerce China.
China has committed to protecting its legitimate interests and upholding international fairness and justice. The general sentiment is that Beijing is deeply skeptical of U.S. intentions.
"In any potential dialogue or negotiations, if the U.S. does not correct its erroneous unilateral tariff measures, it will demonstrate a complete lack of sincerity and further undermine mutual trust. Talking one way and acting another, or even trying to use negotiations as a cover for coercion and blackmail, will not work with China," stated the Chinese embassy in the U.S.
As neither side offers specific concessions ahead of the meeting, crypto traders fear that the summit could result in another diplomatic deadlock.
Against this backdrop, any hint of escalation could act as a catalyst for volatility that undermines Bitcoin's growth potential. Conversely, positive developments at the meeting could provide support for Bitcoin, as happened when Trump announced a major deal with the UK.
"Donald Trump just signed a massive new trade deal with the United Kingdom, the first since the implementation of global tariffs. Markets are exploding. Bitcoin just surpassed $100,000 for the first time since February," noted a user on X (Twitter).
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