The top two cryptocurrencies, Bitcoin and Ethereum, have experienced impressive gains of 3.0% and 5.8%, respectively, in the last 24 hours. Evidently, both these cryptos have benefited hugely from the recent interest rate cut of the US Federal Reserve. At this juncture, the massive options expiry scheduled for today is extremely crucial. How will the expiry impact the cryptocurrency market? It’s time to delve into the details!
Impact of Options Expiry on Bitcoin and Ethereum
As per the data collected from Derbit, at least 20,037 Bitcoin options contracts, worth as much as $1.26 billion, and nearly 125,046 Ethereum options contracts, worth around $308 million, will expire today. The Bitcoin options contracts will expire with a put-to-call ratio of 0.85. This indicates that the majority of the participants hold a bullish view about the Bitcoin market, aligning with various analysts’ bitcoin price predictions.
Meanwhile, the Ethereum options contracts will expire with a put-to-call ratio of 0.65. This implies that the preponderance of the participants has an optimistic view about the potential growth of the Ethereum price. Compared to Bitcoin, Ethereum looks more bullish based on the collected put-to-call ratio data, as, in the ETH options market, those who bet against the possibility of the price going up are fewer (just 65 out of 100), while, in the BTC options market, it is around 85 out of 100.
Should the Crypto Market Expect Short-Term Volatility?
The recent US Federal Reserve Interest Rate cut has influenced the prices of both BTC and ETH optimistically. A strong bullish momentum emerged in the Bitcoin market on September 17. It took the price to around $61,715 at the close of September 18, and to $62,932 at the close of yesterday. Today, the BTC price stands at $63,720.
Likewise, on September 17 itself, Ethereum also embraced a bullish trend. Now, the market is preparing to create a new monthly high. On September 2, the ETH price peaked at $2,538, before slipping to a monthly low of $2,226 on September 6. The Ethereum market is expected to create a new monthly peak today. Yesterday, at the time of close it was at $2,463. Now the price is near the level of $2,500.
Maximum Pain Points and Market Movements
Notably, the maximum pain point of today’s BTC options contracts expiry is nearly $58,500. At present, the BTC price stands far above the point, and is less likely to fall below it. At the same time, the maximum pain point of today’s ETH options contracts expiry is $2,350. Currently, the ETH price is higher than this point, and there is little chance for the price dropping below it.
In conclusion, an options expiry usually creates volatility, especially when the corresponding asset’s price stays close to the maximum pain point. Therefore, it is important to closely monitor market movements on the day a crucial expiry is scheduled.
Also Read: Ethereum Price Analysis: ETH Price Ready For A Major Reversal In Q4?
