Crypto traders and investors are preparing for a potentially volatile day as approximately $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options expire today.
The expiration of such a significant amount of options typically leads to price fluctuations, and participants are closely watching for any potential market shifts around 8:00 UTC.
Breakdown of Expiring Options
According to data from Deribit, nearly 27,000 Bitcoin contracts are set to expire today, with a notional value of approximately $2.6 billion. These expiring options are expected to create a considerable amount of market movement, especially since the maximum pain point for Bitcoin is set at $91,000. This level represents the price point at which the majority of contracts will expire worthless, potentially putting downward pressure on Bitcoin’s price.
Bitcoin’s put-to-call ratio currently stands at 1.01, suggesting a bearish sentiment as more investors are betting on the price going down (via put options) than those anticipating a price increase (via call options). Despite this, analysts note that the overall sentiment remains predominantly bullish, with some predicting a push toward $100,000 in the near future.
Ethereum’s Outlook: Bullish Sentiment Dominates
On the other hand, Ethereum’s market sentiment appears more optimistic. Ethereum’s put-to-call ratio is 0.92, indicating a more bullish outlook compared to Bitcoin. Data shows that 184,296 Ethereum contracts are expiring today, with a total notional value of around $340.7 million. The maximum pain point for Ethereum is set at $1,800, a level that could pressure prices downward if breached.
Ethereum has experienced a modest increase in price, rising by 2.27% since Friday’s session opened, trading at $1,848 at the time of writing. Despite Bitcoin showing stronger call stacking, which suggests more optimism for BTC, Ethereum’s market performance also shows strength, and the bullish sentiment among traders remains intact.
Bitcoin’s Strong Call Stacking Above $95K
Bitcoin is showing a significant amount of call option stacking above the $95,000 level, reflecting optimism among traders. Analysts at Deribit have pointed to the market’s growing confidence in Bitcoin’s continued rise. As of today, Bitcoin is trading at around $97,108, up nearly 3% in the last 24 hours, with many traders positioning themselves for further price increases. The strong call stacking at $95,000 suggests that many market participants believe Bitcoin will continue to rally beyond this price point.
Despite the bullish outlook for Bitcoin, analysts at Greeks.live caution about potential volatility due to the options expiration. They note that while low volatility presents opportunities for long positions, the upcoming expiration could fuel short-term price movement before stabilizing.
Market Structure and Strategy: Low Volatility and Gamma Collection
The current market structure is characterized by low volatility, which has prompted some traders to focus on collecting gamma by selling options. In this strategy, traders sell options to profit from relatively stable prices, managing small price movements and collecting premiums. This strategy is generally employed in low-volatility markets, where significant price swings are less common.
Traders are also paying attention to Bitcoin’s steady rise as a signal for potential volatility positions, particularly in July. Vega gains, which occur when option prices rise due to increased market volatility, are another area of focus for traders holding options sensitive to volatility.
Potential Impact of Expiring Options on Bitcoin and Ethereum
As $3 billion in Bitcoin and Ethereum options expire today, both cryptocurrencies could see notable price volatility, especially if the maximum pain points are reached. The expiration of options can trigger short-term price consolidation, as was observed with last week’s $8.05 billion options expiry.
Despite the volatility risk, analysts believe that the bullish sentiment in the market, particularly for Bitcoin, could fuel a price surge beyond the $95,000 mark. As traders adjust their positions and the contracts settle around 8:00 UTC, the market may stabilize, potentially setting the stage for further price movement in the coming days.
Conclusion
With $3 billion in Bitcoin and Ethereum options set to expire today, crypto traders and investors are bracing for potential volatility. Bitcoin’s bearish put-to-call ratio suggests some caution, but the significant call stacking above $95,000 indicates optimism for a price surge. Meanwhile, Ethereum’s more bullish sentiment and steady performance further contribute to the positive market outlook. As the expiration process unfolds, market participants should remain vigilant and adjust their strategies accordingly, keeping an eye on key price levels and volatility indicators.
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