Bitcoin Options Expiry Insights: As the crypto world anticipates the significant Bitcoin options expiry this Friday, the overarching question remains: Will this event influence the current market trend? With the total open interest, inclusive of Ethereum options, standing at a staggering $730 million, the crypto markets seem to be in a state of flux.
Today, approximately 14,000 Bitcoin options contracts, representing a notional value close to $400 million, are set to expire. This event, though substantial, doesn’t match the magnitude of last week’s expiry, which marked both the month and quarter’s end.
The term “max pain” in the crypto sphere refers to the price level with the highest number of open contracts. For today’s Bitcoin options, this point is pegged at $27,000, a figure that’s roughly $500 below Bitcoin’s current spot price. This level also signifies where the most significant losses might occur upon contract expiration. With a put/call ratio of 0.89 for today’s options, it’s evident that the sellers of both longs and shorts are nearly at equilibrium.
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Market analytics platform, Greeks Live, highlighted that while Bitcoin spearheaded this week’s upward trend, the overall implied volatility remains relatively muted. They also pointed out the reduced trading volume in Asian markets, attributing it to holiday factors.
Historically, October and the concluding quarter have witnessed uptrends. However, Greeks Live added a note of caution, stating, “With the high share of puts positions and the recent liquidity dip, significant market movements might be on the horizon this month.”
Ethereum Options Expiry Overview: In addition to Bitcoin, approximately 200,000 Ethereum options contracts, with a notional value of $330 million, are slated for expiry on October 6. This brings the combined total for both Bitcoin and Ethereum to an impressive $730 million.
The Ethereum contracts exhibit a put/call ratio of 0.87, closely mirroring the ratio observed in BTC derivatives.
However, market experts believe that this week’s options expiry might not significantly sway the spot markets, which have been on a decline. Post its momentary surge to $28,500 on Monday, Bitcoin has witnessed a 3.5% dip, currently trading at $27,485. Without any fresh stimuli, it’s plausible that Bitcoin might gravitate towards the $27,000 support level.
On the other hand, Ethereum, after its Monday surge, has seen a 6.6% drop, trading at $1,620 during Friday’s Asian trading hours. The support for Ethereum presently hovers just below the $1,600 mark.
