Bitcoin Options Expiration: $3 Billion Set to Influence Price Volatility with Bearish Sentiment and Trader Optimism

• Today marks a significant moment in the crypto market, as nearly $3 billion in Bitcoin (BTC) and Ethereum (ETH) options are set to expire, potentially leading to notable price fluctuations.

• Market sentiment is mixed, with Bitcoin’s put-to-call ratio indicating bearish sentiment while Ethereum showcases a more optimistic perspective.

• According to analysts at Greeks.live, Bitcoin is witnessing strong call option stacking above $95,000, suggesting trader optimism amid volatility risks from the expiring options.

This article analyzes the $3 billion Bitcoin and Ethereum options expiring today, providing insights on market sentiment and potential price implications in a volatile landscape.

$2.95 Billion Bitcoin and Ethereum Options Expiring

According to data from Deribit, approximately 26,949 Bitcoin contracts are set to expire today, representing a notional value nearing $2.6 billion.

The striking maximum pain point, defined as the price at which the greatest number of option holders will incur losses, is pegged at $91,000. At this price point, most of the options will expire worthless.

With a put-to-call ratio of 1.01, Bitcoin traders appear to have a predominantly bearish outlook, as they are placing more sell (put) orders than buy (call) orders. Conversely, Ethereum presents a different narrative with a put-to-call ratio of 0.92, signaling a bullish sentiment in the market.

Ethereum’s expiry today includes 184,296 contracts, carrying a notional value of around $340.7 million and a maximum pain point of $1,800. Notably, Ethereum has experienced a modest price increase of 2.27%, trading at $1,848 as of this report.

Despite the bearish call skew in Bitcoin, Greeks.live analysts identify a robust bullish sentiment prevailing in the market. They highlight expectations of a push towards the $100,000 mark due to the low volatility and market structure.

“Key levels being monitored include the $96,000 Naked Point of Control (NPOC) and the $94,400 Volume-Weighted Average Price (VWAP), although some traders remain cautious due to historical trends of ‘sell in May and go away’,” stated Greeks.live.

The low volatility environment presents opportunities for long positions. Greeks.live notes that market makers are actively selling calls at 30% implied volatility (IV) to benefit from gamma, while also indicating that leverage remains low. This suggests potential upside, with traders anticipating forthcoming rate cuts.

Traders are also exhibiting varied strategies; some are shorting Ethereum while others concentrate on Bitcoin’s steady rise, considering July volatility positions for potential vega gains. Vega gains occur when option prices escalate due to increased market volatility, benefiting traders holding options with heightened Vega sensitivity.

As analysts at Deribit underline, many traders are focusing their attention on Bitcoin’s consistent upward trajectory. A significant amount of call options is stacking above $95,000.

“The market displays strong BTC call stacking above $95K—what impact will the expiry bring?” queried analysts at Deribit.

As of this update, Bitcoin is trading at approximately $97,108, marking nearly a 3% increase over the last 24 hours.

This heavy call options stacking signals trader optimism for an impending price surge. However, it’s essential to recognize that the expiry of options may instigate volatility, a pattern observed last week when an $8.05 billion options expiry led to short-term price consolidation. Typically, volatility subsides once the contracts settle around 8:00 UTC on Deribit.

Conclusion

Today’s expiry of nearly $3 billion in Bitcoin and Ethereum options serves as a crucial indicator of market sentiment and potential price actions. As traders navigate this landscape, keeping an eye on critical levels and sentiment shifts will be key to optimizing their strategies in the ever-evolving crypto market. The current setup offers both hazards and opportunities, encapsulating the intricate dynamics driving today’s trading environment.