Today, approximately $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire, creating significant anticipation in the crypto market.
These expiring crypto options come ahead of President-elect Donald Trump’s inauguration week. Bitcoin is at the forefront of the ascent by reclaiming the $100,000 mark.
Over $2.8 Billion in Bitcoin and Ethereum Options Expire
According to Deribit data, 21,664 Bitcoin contracts, with a notional value of approximately $2.2 billion, are set to expire today. Bitcoin’s put-to-call ratio is 0.94.
The maximum pain point – the price at which the asset will cause financial losses for the greatest number of holders – is $96,000. Here, most contracts will expire worthless.
Likewise, crypto markets will experience the expiration of 182,454 Ethereum contracts, with a notional value of $612.2 million. The put-to-call ratio for these expiring Ethereum options is 0.36, with a high of $3,250.
Options expiration often results in notable price volatility, making it imperative that traders and investors closely monitor current developments. Put-to-call ratios below 1 for Bitcoin and Ethereum indicate market optimism. This suggests that more traders are betting on price increases, reflecting positive market sentiment.
Bitcoin’s decision to reclaim the $100,000 matches this market optimism. Meanwhile, analysts at Greeks.live attribute this sentiment to anticipation of Donald Trump’s presidency, as he has promised to be a “crypto president”, likely to favorably influence industry policies. Analysts also cite the expectation of no rate cuts, which could influence market sentiment towards cryptocurrencies.
“Bitcoin surged above $100,000 again, sweeping away gloomy weekend market sentiment… Trump will officially take office as the new US president next week, and whether or not he will enact policies directly is worth watching favorable to cryptocurrencies this month. US stocks have rallied in recent days, and the rate meeting at the end of the month will be all about maintaining no rate cuts,” shared Greeks.live on X (Twitter).
Nevertheless, analysts observe that the implied volatility (IV) of short-term options has increased, with a significant increase in long-term strength. In doing so, they advise investors to buy some of the short-term options, citing the focus on expected policy changes from the incumbent government and the influx of ETFs (exchange-traded funds).
Additionally, Greeks.live highlights how the trading behavior of different regions affects the price of Bitcoin. Asia and Europe sold Bitcoin, leading to a drop in prices, which was then bought back by the Americans, strengthening the market trend. This reflects the global interaction in cryptocurrency markets.
“Asia and the EU sold BTC today, then the Americans bought it back at the bottom? Turning a red day into a green day for BTC,” the post read.
Despite this otherwise sarcastic comment on price action, this interaction, just before anticipated volatility due to Trump’s inauguration, suggests an underlying context of political events influencing market sentiment.
Data from BeInCrypto shows that at the time of writing, Bitcoin was trading at $101,187. This represents a modest increase of 1.62% since the opening of Friday’s session.
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