Key Points
- $15 billion worth of Bitcoin and Ethereum options are set to expire today.
- Despite the recent crypto market uptick, the price movement of Bitcoin and Ethereum remains uncertain.
Bitcoin (BTC) and Ethereum (ETH), the two largest cryptocurrencies globally, are on the brink of a historic event with a $15 billion options expiry scheduled for today. Despite the recent uptick in the crypto market, BTC and ETH are facing liquidity uncertainty, which raises questions about their future price movement.
Bitcoin and Ethereum Options Expiry Details
According to data from the Professional Options Traders’ platform, GreeksLive, a total of 135,000 Bitcoin options and 1.58 million Ethereum options are set to expire today. As per Deribit data, the $15 billion expiry is one of the largest in the exchange’s history. The expiry will wipe off 40% and 43% of the total notional open interest in Bitcoin and Ethereum, respectively, across all maturities. This results in notional values of $9.5 billion and $5.6 billion for BTC and ETH respectively. Notional open interest refers to the dollar value of active contracts at a given time.
For Bitcoin options, the Put Call Ratio stands at 0.85, indicating a slight preference for put options. On the other hand, Ethereum has a Put Call Ratio of 0.63, with a Maxpain point of $2,600. It’s important to understand that a Call Option gives a trader the right to buy an underlying asset at a preset price at a later date, while a Put Option grants the right to sell an asset at a preset price, regardless of its dollar value.
Effect on Bitcoin and Ethereum Price
This quarterly event comes at a time when the crypto market is witnessing a significant rally. Specifically, BTC is hovering around $70,000, showing strong momentum with a 24-hour trading volume of $30.8 billion. Conversely, ETH is trading at around $3,500, with its trading volume standing at $13.8 billion.
However, Implied Volatility (IV) remains strong across all key terms. This indicates increased uncertainty and anticipation among traders about potential price fluctuations following the expiration. With the strike price for Bitcoin and Ethereum’s Call Options set at a relatively low price, investors may opt to buy additional assets at a lower price, potentially causing the price to increase.
A key event that could contribute to Bitcoin’s price climbing higher is the halving event scheduled for April. The Bitcoin halving occurs when Bitcoin’s mining reward is halved. The blockchain network takes approximately four years to open 210,000 more blocks, a criterion established by the blockchain’s creators to limit the rate at which the coin is introduced.
Historically, Bitcoin halving events have been associated with significant price changes, especially when accompanied by massive inflows into spot Bitcoin ETF products trading in the US. However, market participants, including the Coinbase crypto exchange, have noted in a previous report that established trends may not hold for this round due to pattern variations.
