Cryptocurrency markets brace for major move as $3 billion in Bitcoin and Ethereum options expire
As cryptocurrency options worth billions of dollars are set to expire today, investors are preparing for potential market volatility. With a significant amount of options contracts reaching their expiry date, how will this impact the crypto market?
Volatility decreases as major cryptocurrency options expire
Deribit data shows that around $2.34 billion worth of Bitcoin options are expiring today, with a maximum loss of $66,000 and a put to call ratio of 0.58. The number of contracts expiring this time has decreased to 36,732 contracts, a substantial drop from last week’s 61,320 contracts.
Additionally, Ethereum has 183,756 contracts expiring soon, totaling $577.2 million in notional value. The maximum loss on these contracts is $3,300, with a put to call ratio of 0.55.
Read more: Introduction to Cryptocurrency Options Trading
Market sentiment and implications of option expiry
The cryptocurrency options market’s biggest pain point lies in the price levels that cause the most financial discomfort to option holders. The put to call ratio indicates a preference for buying options (calls) over selling options (puts).
Greeks.live, a cryptocurrency options trading tool, reveals insights into the options expiring today. The Dvol index has dropped by nearly 15% since the July monthly delivery, signaling a decrease in market volatility. Implied volatility (IV) is currently at its lowest for the year.
Transitioning to market analysis, Greek Live analysts note a decline in volatility due to the smooth progress of significant events like the Bitcoin 2024 meeting and the FOMC meeting. However, the market lacks “hot spots,” with Ethereum ETFs awaiting stable positive capital inflows.
“Historical trends suggest a generally bullish season, making it a good time for mid- to long-term call options,” advised analyst Adam.
Recent price movements and market stability
Starting the month at $66,342, Bitcoin has seen fluctuations, currently holding at around $64,714. Meanwhile, Ethereum dropped from $3,317 to $3,097 before rebounding to $3,178 on August 1.
Learn More: 9 Best Cryptocurrency Options Trading Platforms
Managing potential volatility and market response
Historically, options contract expirations trigger sharp but temporary price movements in the market, with stability returning over time. Traders should monitor technical indicators and market sentiment to effectively navigate potential volatility.
The information contained on the BeInCrypto website is published in good faith and for informational purposes only. Users are solely responsible for any consequences arising from the use of the information on this website.
In addition, part of the content is the AI translation version of the English version of the BeInCrypto article.
