Bitcoin and Ethereum Options Expiration Impact on Market Recovery
Overview of Options Expiration
As approximately $2.5 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire today, investors are closely monitoring market conditions for potential changes following Monday’s cryptocurrency market crash.
Bitcoin Options Expiration
Deribit reported that $1.94 billion worth of Bitcoin options are expiring, with a maximum loss of $60,000. There are 31,615 contracts expiring, indicating an overall bullish sentiment with a put to call ratio of 0.71.
Ethereum Options Expiration
Additionally, Ethereum options worth $552.13 million are expiring, involving 206,626 contracts. The maximum spread on these options is $2,950, with a put to call ratio of 0.95, showing a slightly bearish sentiment compared to Bitcoin options.
Analyzing Market Conditions
Analysts at Greeks.live highlighted the high implied volatility (IV) for major options at over 60%, while Bitcoin’s seven-day realized volatility (RV) stands at 100%. Despite recent market volatility, buyers appear to be more active than sellers in the options market.
Moreover, the recent market crash on Monday led to significant price drops in both Bitcoin and Ethereum, resulting in liquidations exceeding $1 billion. However, the following day showed signs of recovery, with Bitcoin surpassing $60,000 and Ethereum climbing to $2,700.
Managing Potential Volatility
Historically, options contract expirations tend to cause temporary but rapid price movements in the market. Traders need to remain vigilant, analyze technical indicators, and monitor market sentiment to effectively manage potential volatility and navigate market fluctuations.
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