It’s a big day for Bitcoin and Ethereum options, as many contracts are set to expire. Cryptocurrency options are derivative contracts that allow traders to buy or sell assets at specific prices on specific dates. Unlike futures, options provide more flexibility because traders are not obligated to buy or sell if they choose not to.
The notional value of the expiring Bitcoin contracts is $1.58 billion, while the Ethereum contracts amount to $610 million.
The BTC put to call ratio remains at 1.02, indicating that the price at which the largest number of option holders would experience losses is around $42,000. This week’s delivery price is close to the maximum pain point, leading to potential significant market movements.
Similarly, the Ethereum options put/call ratio is 0.66, with a maximum pain point at $2,250.
This week, the crypto market experienced a pullback, causing Bitcoin to drop to $40,000. Traders have been active in selling protective options, resulting in a larger number of put positions compared to call positions. Bitcoin options continue to dominate the market, with the implied volatility (IV) remaining unchanged for almost a month and significant shifts in options activity occurring.
The price of Bitcoin dipped below $41,000 multiple times, but it managed to recover some of its losses after the release of inflation data in the United States and the announcement from the Federal Reserve regarding the suspension of key rate hikes.