Major Expiry: $14.21 Billion in Bitcoin and Ethereum Options Ending Today
Today is a crucial moment in the world of cryptocurrencies, as approximately $14.21 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire. This event holds significant importance for market watchers due to its potential impact on short-term price trends based on the volume and value of these contracts.
Insight into Expiring Options
The expiration today signifies a substantial combined value of $12.075 billion in Bitcoin options across 139,260 contracts. Data from Deribit reveals a put-to-call ratio of 0.49, indicating a higher presence of call options over puts. The critical point for these contracts is identified at $85,000, as it represents a level where option holders may face substantial financial losses.
Besides Bitcoin, 1,068,519 Ethereum options contracts worth a total of $2.135 billion are also coming to an end today. These contracts exhibit a put-to-call ratio of 0.39 and have a crucial threshold at $2,400. The volume of expiring options has notably surged compared to the previous week, where expirations were significantly lower in both Bitcoin and Ethereum options.
Timing of Option Expirations
The increased volumes of contracts this week can be attributed to the month and quarter-end, with today marking the final Friday of March. Deribit, a prominent cryptocurrency derivatives exchange, aligns its options expiry with traditional financial markets, typically scheduling expirations at the week’s end to maintain market familiarity and liquidity.
Deribit noted, “Tomorrow marks one of the significant expiries of the year, with over $14 billion in BTC and ETH options set to expire at 08:00 UTC,” sparking interest in how the first quarter will conclude.
Insights on Implied Volatility
Analysts at Deribit are closely monitoring the implied volatility (IV) curves for Bitcoin and Ethereum during today’s expirations. Bitcoin’s IV curve indicates a bias towards higher prices, with calls valued significantly higher than puts, signaling a positive sentiment. Ethereum’s IV curve, on the other hand, is more balanced, suggesting a stable outlook with noteworthy volatility expectations leading up to the expiry.
Deribit analysts noted, “Chart 1 – $BTC: BTC demonstrates an upward skew, with higher call prices. Chart 2 – $ETH: ETH’s curve shows less skewness, but trading volume remains high overall,” suggesting anticipations of price fluctuations before and after the expiry.
Furthermore, analysts from Greeks.live highlighted a slightly bearish sentiment among Bitcoin investors, anticipating a retesting of lower price levels around $84,000 to $85,000. With Bitcoin currently trading around $85,960, a potential downturn is being envisaged in the short term.
Market Impact and Future Predictions
Despite indications of a possible downturn, some traders suggest that Bitcoin is currently confined within a narrow trading range, hinting at limited volatility unless a significant breakout occurs. Key resistance is noted at $88,400, where substantial selling activity has been observed, while potential support lies at $77,000, considered a crucial level by certain traders.
Additionally, Greeks.live analysts mentioned the pressure on implied volatility due to quarterly contract maturation, suggesting potential trading opportunities stemming from these fluctuations.
Summary
Todays’ expiration of $14.21 billion in Bitcoin and Ethereum options carries paramount significance for the cryptocurrency market, impacting present trading dynamics and shaping future sentiments. As stakeholders keep a close eye on essential price levels and volatility trends, these expirations underscore the intricate relationship between options trading and market movements. Vigilance is advised among investors, considering the potential for notable price shifts following today’s developments.
