The cryptocurrency market is expected to experience potential volatility with the expiration of Bitcoin and Ethereum options worth about $3.7 billion today.
With the notional value of Bitcoin options at $3.1 billion and Ethereum options at $588 million, traders are watching expiration for its potential impact on prices.
Cryptocurrency markets are witnessing the expiration of $3.7 billion in Bitcoin and Ethereum options.
According to data from Deri,,bit, 30,750 Bitcoin options contracts will expire on June 6. This slice is much smaller than the 92,459 contracts last week.
These contracts have a sell-to-buy ratio of 0.7 and a maximum pain point at $105,000.
Expired Bitcoin options.
Similarly, the Ethereum options market is set to expire with 240,054 contracts. Today's expiring Ethereum contracts have a sell-to-buy ratio of 0.63 and a maximum pain point at $2,575.
Expired Ethereum options.
In cryptocurrency options trading, traders analyze sell-to-buy ratios to gauge market sentiment. The sell-to-buy ratio for Bitcoin indicates a spread of call options over put options, suggesting more positive expectations. The same applies to Ethereum, where the sell-to-buy ratio is also below 1.
Notably, Bitcoin was trading at $102,769 at the time of writing. Meanwhile, Ethereum was trading at $2,456, with both assets below their maximum pain points.
The maximum pain point indicates that Bitcoin and Ethereum prices may hover around these critical levels as options expiration approaches. This explains the positive outlook as both assets remain below their strike prices. This could lead to losses for both bulls and bears.
With the settlement of these options, volatility may arise, with the potential for sudden price shifts. However, this depends on how the market reacts.
"Call options dominate the curve. What do you expect to happen after expiration?" analysts at Deri,,bit wondered.
Bitcoin traders are bearish in the short term, but a massive options bet indicates optimism in the third quarter.
Elsewhere, Bitcoin traders are showing signs of caution. This is likely attributed to the dispute between President Donald Trump and Elon Musk.
According to Gree,,ks.,live, most market participants remain pessimistic and expect further correction. The range of $105,000 to $109,000 is seen as a strong resistance area. Many traders believe Bitcoin will struggle to break through it in the short term.
Volatility remains unusually low, creating a challenging environment for options traders. In response, many are selling short-term call options expiring on June 7, especially around the $108,000 to $109,000 level.
This strategy reflects the belief that Bitcoin will remain below that resistance in the near future. Some traders use this approach as a long-term trading strategy.
Specifically, they expect a potential rise to $150,000 by the fourth quarter (Q4), but not before further weakness or consolidation in the short term.
"Traders suggest implementing a short call spread strategy as a potential 'flying wheel' for traded permanent portfolio positions, with a view that Bitcoin may reach $150,000 by the fourth quarter," noted Gree,,ks.live in a post.
Many traders remain on the sidelines despite the temptation to buy in the market now. They are waiting for a deeper decline before entering long-term positions.
Furthermore, analysts also reported the largest options trade in cryptocurrency history. The trade was valued at $1.19 billion and involved 11,350 Bitcoins, generating $7.5 million in premiums.
This trade has been split into two parts. The first is a bullish spread for September, betting on both a price increase and higher volatility later this year. The second is selling at-the-money (ATM) call options for July, indicating low short-term bullish expectations.
However, the market remains calm and uncertain ahead of today's options expiration. Some traders are preparing for a significant move later in the year. The large options trade indicates that while July may remain stable, there is increasing confidence in a stronger rise for Bitcoin by the third quarter.
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