Over $1.2 Billion in Bitcoin and Ethereum Options Expire Today. How Can It Affect the Market?

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Today’s session is marked by the expiration of cryptocurrency options, with approximately $2.4 billion in contracts ready to be settled or renewed. This event includes the expiration of around 36,000 Bitcoin (BTC) options contracts and 262,000 Ethereum (ETH) options contracts.

The notional value of expiring Bitcoin options contracts today reaches $1.68 billion. There is a balance between bulls and bears, with a buy/sell ratio of 0.9. The maximum pain point for this set is at $45,000, slightly lower than the current spot market price. Additionally, there is significant open interest at the $50,000 strike price, with $1.2 billion in call options. This concentration suggests that derivative traders anticipate an increase in BTC prices by the end of January.

Simultaneously, Ethereum options with a notional value of $680 million are set to expire. The buy/sell ratio for these options is 0.64. The maximum pain point is at $2,400, also lower than current market prices. Furthermore, there is notable open interest in call options with strike prices of $2,500 and $3,000 for ETH.

Despite the magnitude of the options expiration, cryptocurrency markets are up by 1%, reaching a total value of $1.86 trillion. The Bitcoin price holds at $46,168, while Ethereum, which performed well during the week, is trading slightly above $2,600 at the time of writing.

Bitcoin Generated Less Volatility Than Expected

Expert commentators analyzed market performance, including Greek’s Live, who notes that the approvals of Bitcoim spot ETFs this week unfolded as expected. However, he emphasizes that fake news contributed to market volatility, leading to frequent and abrupt movements.

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Regarding term implied volatility, there was a significant contraction due to lower-than-anticipated market volatility. Although the long-term outlook is strong, with a steady flow of capital into the crypto market, there is a warning about persistent short-term uncertainty. Factors at play could maintain acute volatility for several days, as indicated by Greek’s Live.

We have interesting days ahead, where we will witness the real impact of the anticipated ETFs. Despite short-term uncertainty, the long-term outlook remains robust, marked by a continuous flow of capital into the crypto space.


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