The crypto market may be gearing up for more volatility, with Bitcoin and Ethereum options worth a combined $5.78 billion set to expire today.
Since the start of the week, the cryptocurrency market has seen intense and rapid price actions, especially towards the downside. Bitcoin and Ethereum, the two largest cryptocurrencies by market cap, have led this charge, capitulating 18% and 24%, respectively.
Meanwhile, the market could see more swift price developments, with options worth a staggering $5.78 billion set to expire. This is particularly interesting, as the max pain point for these expiring options contracts is opposite the predominant market direction.
Bitcoin Options Worth $4.66B Running Its Course
Data from Greeks.live shows that 59,000 BTC options worth $4.66 billion are expiring today. The contracts have a put-call ratio of 0.7, a somewhat neutral market disposition, and a max pain point of $96,000.
Interestingly, the max pain, which highlights the price at which most options expire worthless, of $96,000 indicates that most options calls were accurately betting on lower prices. Notably, the pain price mark is over 17% away from the current market price, a gap market makers could be looking to close to reduce cashouts.
Ethereum Options Worth $1.12B Expiring Likewise
Concurrently, 529,000 ETH options with a notional value of $1.12 billion would expire alongside the Bitcoin contracts. With a relatively bullish put-call ratio of 0.52, the options contracts’ max pain stands at $3,000, 36% away from Ethereum’s current price.
It remains to be seen if market makers can defy the predominant bearishness and push prices closer to the options’ pain point. Nonetheless, Greeks.live stated that options majors have increasingly sold short and intermediate since the past month, with smart money traders winning the bets again.
Market Panic Spikes Volatility
Further, the Greeks.live analysis shows extensive market volatility amid a strong downturn in US stocks and bonds. Notably, a major catalyst for this panic sprung from US President Donald Trump’s renewed tariff rate hike on major countries such as China, Canada, and Mexico.
Following the market crash, implied volatility (IV) spiked for Bitcoin and Ethereum. Bitcoin’s short-term volatility surged to 90% at one point in the week, and Ethereum’s short-term volatility exceeded 100%.
Nonetheless, the market seems to have stabilized, with Bitcoin reclaiming $82,000 and Ethereum $2,170. The duo are up 5% from their intraday lows of $78,179 and $2,073.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
