A large volume of Bitcoin (BTC) and Ethereum (ETH) options, worth approximately US$9.26 billion, will expire this Friday (26).
This event involved 96,172 BTC contracts and 987,000 ETH contracts. The expiration of these options requires analysis to determine their possible impact on market dynamics and the prices of these assets.
Bitcoin and Ethereum options about to expire
According to Deribit, BTC’s buy/sell ratio remains at 0.68. This means that traders who bet on the rise (long) still sell more options than those who bet on the fall (short).
The maximum point (the price at which the asset will cause financial losses for the greatest number of holders) is at $61,000. The cryptocurrency currently trades at $64,600.
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Meanwhile, the scenario is a little different for Ethereum. The second-largest cryptocurrency has a buy/sell ratio of 0.51 and a high of $3,100.
Deribit analysts warn traders to be cautious due to several factors.
“It is the first monthly expiry after the recent halving and could also be affected by the earnings of some of the big technology companies this week, such as Tesla, Meta and Google. Geopolitical tensions remain, as do concerns about further delays in rate cuts. All of this, coupled with strong open interest in Bitcoin and Ethereum options, could mean we are in for some fireworks around expiration.” https://twitter.com/DeribitExchange/status/1783474982560858557 Deribit analysts.
Read more: An Introduction to Cryptocurrency Options Trading
Price Movement
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However, during expiration, there was minimal price volatility as Bitcoin traded in a tight range between $64,200 and $64,600.
Over a broader time frame, BTC has fluctuated between $62,000 and $67,000, with its current price around $64,200. Ethereum mirrored this consolidation pattern. This behavior shows the market’s sensitivity to underlying currents and the importance of strategic trading decisions during options expiries.
Further complicating the market outlook is the dynamics of spot Bitcoin exchange-traded funds (ETFs). According to data from SoSo Value, there was a significant net outflow of US$218 million from ETFs last Thursday (25).
Prominent funds such as Grayscale’s GBTC, Fidelity’s FBTC, and Valkyrie’s BRRR have seen significant withdrawals. However, Franklin Templeton’s EZBC was an exception, recording a net inflow of $1.87 million.
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It is interesting to note that BlackRock’s IBIT has not yet recorded a positive balance in the reporting period. This marks two consecutive days in which IBIT recorded no inflows.
These movements are critical as they reflect investor sentiment and market liquidity, which can cushion the impact of option expiries or exacerbate price volatility. The net outflows suggest a cautious or bearish stance among investors, potentially preparing for price adjustments after expiration.
However, readers should note that the market typically recalibrates after expiration, stabilizing price trajectories as new positions are established.
Disclaimer
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