A significant crypto options expiry event is set to take place today, marking the close of the month and the third quarter. With approximately 89,000 Bitcoin options contracts, valued at around $5.8 billion, expiring, the market could experience notable shifts. As the week has shown upward momentum in spot prices, traders are eager to see how this expiry might influence the markets.
Understanding the Crypto Options Expiry
Today’s event is one of the largest Bitcoin options expiries this year, with a put/call ratio of 0.64. This suggests that more traders have been betting on price increases (calls) than decreases (puts). The “max pain” point — the price at which the highest number of losses will occur — is currently set at $59,000, roughly $6,000 below Bitcoin’s current trading price.
Moreover, there is significant open interest (OI) at higher price points, particularly at $70,000, $90,000, and even $100,000, with over $1 billion in OI at the $100,000 strike price alone, according to Deribit data.
Potential Impact on Bitcoin
The large volume of expiring options may bring volatility to Bitcoin’s price in the short term. Given the high number of long positions and the recent price rally, we could either see a boost in market optimism or increased fluctuations as traders adjust their strategies post-expiry. The substantial OI at price levels such as $70,000 and above indicates that some traders expect Bitcoin to continue climbing.
In addition to today’s expiry, other factors have been boosting Bitcoin’s price. Analysts at Greeks Live point to the Federal Reserve’s recent 50 basis point rate cut, which has bolstered market confidence. With the fourth quarter historically performing well for crypto, optimism remains high, especially with additional macroeconomic factors like U.S. elections and potential future rate cuts.
Ethereum Options Expiry
Alongside Bitcoin, Ethereum is also seeing a large options expiry today. Around 718,000 ETH contracts, worth approximately $1.9 billion, are set to expire. The put/call ratio for Ethereum sits at 0.47, indicating an even stronger bullish sentiment among traders compared to Bitcoin. The max pain point for Ethereum is $2,500, just below its current trading price. Combined, the total value of the crypto options set to expire today reaches $7.7 billion, making this one of the largest expiries since March.
What’s Ahead for Crypto Markets?
While today’s massive options expiry could lead to short-term volatility, the overall sentiment for the fourth quarter remains positive. Greeks Live analysts predict more trading opportunities, as they expect the end of this quarter to bring about large shifts in positions and margin releases. They also foresee low levels of implied volatility, which could present favorable conditions for strategic traders.
Crypto market capitalization has risen 1.4% today, reaching $2.37 trillion, the highest since early August. Bitcoin recently hit a two-month high of $65,700, though it has since dipped slightly to $65,300. Ethereum, despite showing strength, was unable to break resistance at $2,650 and also saw a slight retreat.
Conclusion
The $7.7 billion options expiry is a significant event that could bring volatility to the crypto markets. While Bitcoin and Ethereum both face large open interest at optimistic price levels, the market’s direction will depend on how traders adjust their positions following the expiry. With historical data suggesting a strong fourth quarter and rising market confidence, the long-term outlook remains bullish, though traders should be prepared for short-term fluctuations as the markets respond to today’s expiry.
