Approximately $3 billion worth of Bitcoin and Ethereum options approximate expiration today, largely indicating a bullish outlook among investors.
Gear up, crypto traders and investors! A whopping $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are about to expire today. This occurrence can potentially cause some serious market turbulence, so keep a close eye on the developments throughout the day, especially around 8:00 UTC.
$2.95 Billion Bitcoin and Ethereum Expiring
Deribit data reveals that a staggering 26,949 Bitcoin contracts will be history today. With a notional value of approximately $2.6 billion, these expiring options could pack a serious punch if things go south. The maximum pain point, where the asset will cause financial losses for the greatest number of holders, is set at $91,000. At this price, most contracts will end up worthless.
Bitcoin's put-to-call ratio stands at 1.01, suggesting a bearish sentiment as investors are more inclined to sell (Put) than buy (Call) orders.
On the other hand, Ethereum's put-to-call ratio is a more optimistic 0.92, indicating a generally bullish market for ETH. Deribit data also shows that 184,296 Ethereum contracts will expire today with a notional value of around $340.7 million and a maximum pain point of $1,800.
Ethereum has seen a slight increase of 2.27% since the weekend, currently trading at a cool $1,848.
Analysts at Greeks.live believe the market sentiment, despite the high number of Bitcoin sales calls, is predominantly bullish. They also predict a push toward $100,000, citing low volatility and market structure.
"Key levels being watched include the $96,000 NPOC [Naked Point of Control] that was just hit and the $94,400 rolling VWAP [Volume-Weighted Average Price], though some express concerns about sell in May and go away seasonality," Greeks.live wrote.
With low volatility, traders see an opportunity for long positions. According to Greeks.live, market makers are selling calls at 30% implied volatility (IV) to collect gamma, while leverage remains low. This suggests a potential upside with traders anticipating more rate cuts.
Shortening Ethereum, some traders are taking advantage of its underperforming status compared to BTC, while others focus on BTC's steady climb and consider July volatility positions for vega gains. This split in market focus is a strategic play.
Vega gains occur when option prices rise due to increased market volatility, benefiting traders holding options with higher Vega sensitivity.
Meanwhile, analysts at Deribit agree that some traders are focusing on Bitcoin's steady rise. There is significant BTC stacking above $95,000, pointing to trader optimism for a price surge.
Notwithstanding, it is important to note that options expiring can trigger volatility, as seen with last week's $8.05 billion options expiry, which caused short-term price consolidation. However, volatility around options expiry tends to subside once the contracts are settled around 8:00 UTC on Deribit.
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- Today, a total of $2.95 billion worth of Bitcoin and Ethereum options are set to expire on Deribit, which could cause significant market turbulence.
- Deribit data shows that 26,949 Bitcoin contracts with a notional value of around $2.6 billion will be expiring, while 184,296 Ethereum contracts with a notional value of approximately $340.7 million will also expire.
- The maximum pain point for Bitcoin is set at $91,000, and for Ethereum at $1,800, meaning most associated contracts will end up worthless if prices do not reach these levels.
- Analysts at Greeks.live believe the market sentiment is predominantly bullish, predicting a push toward $100,000 for Bitcoin, but some express concerns about the sell in May and go away seasonality.
- With low volatility in the market, traders are seeing an opportunity for long positions, particularly in Bitcoin and Ethereum options, as market makers sell calls at 30% implied volatility to collect gamma.
- Some traders are focusing on shortening Ethereum, taking advantage of its underperforming status compared to Bitcoin, while others are considering July volatility positions for vega gains. Vega gains occur when option prices rise due to increased market volatility, benefiting traders holding options with higher Vega sensitivity.
