Today, there will be a total expiration exceeding $3.5 billion in Bitcoin and Ethereum options. This indicates that significant fluctuations are expected in the crypto markets in the short term.
The maximum pain price for Bitcoin is set at $106,500, while for Ethereum, this level appears to be $2,650. Market dynamics suggest that prices may move towards these critical points.
Greeks.live analysts indicate that traders are leaning towards put options to provide protection against potential downward risks and that strong buying continues in Ethereum despite the mixed overall market sentiment.
Bitcoin and Ethereum Options Worth $3.5 Billion Face Expiration in Crypto Markets
Today, there is a significant milestone in the crypto derivatives market: Bitcoin and Ethereum options worth $3.5 billion are expiring. According to Deribit data, a large portion of this amount consists of Bitcoin options. A total of 27,959 Bitcoin options contracts will expire, amounting to approximately $2.9 billion in nominal value.
The maximum pain price for Bitcoin has been identified as $106,500; at the time of writing, the Bitcoin price is at $104,342. This level is considered the price at which option holders will incur the most loss.
The put-call ratio for Bitcoin is currently at 0.91, indicating that market participants are slightly more inclined towards call (buy) options, meaning upward expectations are slightly ahead.
On the Ethereum side, 246,849 options contracts will expire, with a nominal value of $617.6 million. The maximum pain point for Ethereum is set at $2,650, while the current price is around $2,515.
Ethereum's put-call ratio of 1.14 indicates that there are more put options compared to call options. This situation reveals that investors are trying to hedge against downward risks, and the market appears cautious or somewhat pessimistic.
Maximum Pain Theory and Market Dynamics
According to the maximum pain theory, during periods approaching the expiration of options, the asset price generally tends to move towards the price level where most options will lose value, i.e., the maximum pain will occur. Market makers can influence price movements as they typically take positions on the opposite side.
Strong Buying Signals Before Ethereum's Expiration
Although Ethereum's put-call ratio paints a negative picture, Greeks.live analysts note that there is a strong buying flow for ETH as the expiration approaches. This indicates that the market is carrying hedging measures alongside the upward expectation.
Deribit analysts emphasize the uncertainty of whether Ethereum will continue its upward trend after the options expiration. "There are strong buying movements for ETH. However, traders are wondering if this momentum will continue after Friday," they state.
Market Sentiment and Strategic Hedging
Greeks.live analysts say that the market currently appears divided, but overall, put options aimed at hedging against downward risks are gaining weight. This indicates a cautious and pessimistic atmosphere prevailing among market participants.
Traders have been increasingly preferring put spreads and protective put strategies to minimize their risks following the recent upward movements. Such strategies particularly stand out during periods of high volatility and unexpected news that could lead to sharp price movements.
Geopolitical and Macroeconomic Factors Affecting Markets
Major determinants of market sentiment include developments in US-China trade talks, recent US inflation data, and the increase in tensions in the Middle East, particularly between Israel and Iran.
JPMorgan analysts warn that geopolitical tensions could complicate the Federal Reserve's efforts to reach its inflation target of 2%, noting that this further complicates market dynamics.
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