Over $2 billion in Bitcoin and Ethereum options are set to expire today, following significant events like the FOMC meeting and the Digital Asset Summit. This expiration could lead to short-term market volatility, as traders monitor the situation closely.
Data from Deribit indicates that many Bitcoin and Ethereum contracts are nearing their expiration. For Bitcoin, a large number of contracts are closing near a price point known as the “maximum pain” level, where most options lose value.
Ethereum is experiencing similar trends, although the number of expiring contracts is lower than the previous week. The put-to-call ratios for both cryptocurrencies are below one, suggesting that more traders are betting on price increases rather than declines.
The “maximum pain” levels imply that market players might push prices toward these zones, causing many options to expire worthless. This strategy aims to minimize payouts by creating price pressure around strike zones with the most open interest. As the expiration deadline nears, prices are drifting closer to these critical points.
Traders have mixed expectations. Some believe that the FOMC’s decision against further interest rate cuts has dampened optimism, potentially leading to downward pressure. Others predict a brief price increase followed by fluctuations before a possible rally.
Market analysts highlight that the area just below current Bitcoin highs is crucial, especially with upcoming political events and potential large corporate purchases. Speculation about institutional involvement, including the US government’s Bitcoin holdings, could influence price expectations positively.
Bitget CEO Gracy Chen expressed confidence, suggesting Bitcoin could stabilize before aiming for higher targets later this year. She believes that strategic reserves and policy changes could enhance investor trust.
Despite this optimism, short-term volatility is expected. Large options expirations often lead to temporary market movements. Traders should stay alert and use technical indicators and sentiment data to guide their decisions.
