Today marks a significant moment in the cryptocurrency world, with nearly $4.6 billion worth of Bitcoin (BTC) and Ethereum (ETH) options set to expire.
This event comes on the heels of the recent US elections and updates from the Federal Open Market Committee (FOMC), which could lead to increased market volatility. Analysts are predicting a flurry of activity as traders make strategic adjustments as the year comes to a close.
Specifically, there are about 48,794 Bitcoin options valued at approximately $3.7 billion and 294,380 Ethereum options worth around $854 million expiring today. The “maximum pain point” for Bitcoin, where most options will expire worthless, is around $69,000, while for Ethereum, it’s at $2,500.
These points are crucial for options traders, as they indicate where the majority of options contracts are likely to end up out of the money, helping traders anticipate market movements.
Currently, the put-to-call ratios for Bitcoin and Ethereum are 0.72 and 0.65, respectively, suggesting a generally optimistic outlook among traders. A lower ratio indicates that more traders are betting on price increases rather than declines.
Following the elections, trading volumes surged to a record $10.8 billion, but as the excitement has waned, some traders have begun to take profits by closing their positions.
Despite recent gains for both Bitcoin and Ethereum, implied volatility is on the decline, which is noteworthy since it typically influences options pricing. Ethereum has shown a stronger ability to hold onto its gains compared to Bitcoin as the market stabilizes.
On the regulatory front, the FOMC’s decision to lower interest rates by 0.25% is viewed as a positive development for the markets.
