Professional Title: Navigating the Volatile Waters of BTC and ETH Options Expiration
Today, 24,000 Bitcoin options, with a notional value of $1.4 billion and a put-call ratio of 0.83, are set to expire at a maximum pain point of $59,500. This signals a bearish sentiment among investors who are betting on Bitcoin to sustain a downward trend.
Additionally, approximately 184,000 Ethereum options, valued at $470 million, are expiring with a put-call ratio of 0.8 and a maximum pain point of $2,650. This ratio reflects bearish sentiment among traders, predicting further price declines.
With $1.87 billion in options set to expire today, historical data suggests that market volatility is imminent. Prices often gravitate toward the maximum pain point, reducing the value of open call and put options. This movement inflicts maximum losses on traders while minimizing sellers’ returns.
As options expire at 08:00 UTC, the market may experience volatility. Bitcoin is trading at $58,506, just 1.7% shy of its maximum pain point. Ethereum is trading at $2,626 and needs a 0.9% shift to inflict maximum loss on bearish option traders.
The volume of options continues to decrease. Notably, options expiring on August 16th account for about 10% of total trading positions and over 20% of those set to expire throughout the rest of the year. The positions expiring this week are less than the notional value of options that expired earlier in the month.
Read more Bitcoin Price Trends in 2024 Reflect Historical Halving Patterns
Options data also revealed an equal distribution of expiries and a strong expiry structure, indicating lower expectations of further market volatility. As the options market lowers its volatility expectations, cryptocurrencies may soon enter a stable period.
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