There are clear signs of turbulence in the cryptocurrency market as options welcome a $2.09 billion expiry on their Bitcoin (BTC) and Ethereum (ETH) counterparts today. Traders are highly expecting price volatility and swings on the cusp of the Federal Open Market Committee (FOMC) minutes alongside a digital asset summit.
An expenditure of over 1 billion dollars will severely impact the market.
Today, Bitcoin options worth $1.826 billion, split into 21,596 contracts, are set to expire, according to data from one of the primary crypto derivatives exchanges, Deribit. The figure does represent a significant amount but is lower than the 35,176 contracts that expired the other week. For Bitcoin, the “maximum pain point,” the price at which the most options expire worthless, equals $85,000.
As Ethereum lags behind, 133,447 contracts worth $264.46 million are set to expire today, which is also a downward contraction from the last week’s 223,395 contracts. Ethereum’s maximum pain point is $2,000.
Somewhere close to 8:00 AM UTC, Bitcoin trades for around $84,414 while Ethereum sits around $1,977. Both positions can hope for a slight push toward their respective maximum pain points, which are strategies that bring a sharp benefit to traders.
Bitcoin and Ethereum (0.83 and 0.62, respectively) seem to have bullish sentiments, as both cryptocurrencies have a call option-to- put option ratio greater than one. However, Greeks.live analysts believe that there is still mixed sentiment on the market.
Some traders believe that price is likely to fall after the FOMC meeting as the policymakers show no signs of easing interest rates. Others expect a temporary spike before a drop. The analysts expect the Bitcoin price to experience high volatility at around $83,000 to $85,000.
On the other side of the spectrum, Gracy Chen, CEO of the Bitget exchange, is more bullish, predicting Bitcoin will stay above $73,000 with significant upside potential up to $200,000. These figures reinforce the idea that a U.S. strategic Bitcoin reserve could stabilize prices and improve institutional support.
Historically, short-term price movements have occurred around the time of options expirations. Although markets stabilize afterward, active traders need to be on high alert. Focused attention to technical indicators that signal shifts in market sentiment is crucial in navigating this volatility.
The sentence “chop and drift lower before rising again on Monday,” as coined by Greeks.live analysts, describes quite well the traders’ sentiment. It is time for traders to prepare for unexpected movements in prices and shifts in trends.
The anticipated developments on the crypto market
The expiration of these multi-billion dollar options contracts greatly illustrates the uncontrolled nature of the crypto market. The contradictions with other options and the price volatility presented for the market in the coming days will redefine what is considered short-term for the market.
The expiry of options, combined with other impactful economic events, highlights how closely related the crypto market is to everything else. After everything is said and done, the market will try to find its footing, which could be problematic.
