Bitcoin and Ethereum Face Crucial Test with $2.04 Billion Options Expiry

Today, approximately $2.04 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire, creating significant anticipation in the crypto market.

Expiring crypto options often leads to notable price volatility. Therefore, traders and investors closely monitor the developments of today’s expiration.

Options Expiry: $2.04 Billion BTC and ETH Contracts Expire

Today’s expiring Bitcoin options have a notional value of $1.62 billion. These 16,561 expiring contracts have a put-to-call ratio of 0.76 and a maximum pain point of $98,000.

Expiring Bitcoin Options. Source: Deribit

On the other hand, Ethereum has 153,608 contracts with a notional value of $421.97 million. These expiring contracts have a put-to-call ratio of 0.48 and a max pain point of $2,700.

Expiring Ethereum Options. Source: Deribit

At the time of writing, Bitcoin trades at $98,215, a 1.12% increase since Friday’s session opened. Ethereum trades at $2,746, marking a 0.20% decrease. In the context of options trading, the put-to-call ratio below 1 for BTC and ETH suggests a prevalence of purchase options (calls) over sales options (puts).

However, according to the max pain theory, Bitcoin and Ethereum prices could gravitate toward their respective strike prices as the expiration time nears. Doing so would cause most of the options to expire worthless and thus inflict “max pain”. This means that BTC and ETH prices could register a minor correction as the options near expiration at 8:00 AM UTC on Deribit.

It explains why analysts at Greeks.live noted a cautiously bearish sentiment in the market, with low volatility frustrating traders. They suggest ongoing concern among traders and investors, particularly around Bitcoin, with traders closely monitoring key price points.

“The group sentiment is cautiously bearish with low volatility frustrating traders. Participants are watching $96,500 level with skepticism about upward momentum, while discussing possibilities of volatility clustering at low levels around 40%,” the analysts wrote.

Elsewhere, Deribit warns that while low volatility feels safe, this sense of safety is only momentary, as markets tend not to wait long.

Bitcoin Price Outlook: Key Levels and Market Outlook

Bitcoin trades around $98,243, hovering above a critical demand zone between $93,700 and $91,000. This area has previously acted as strong support, indicating buyers may step in to defend these levels.

On the other hand, a key supply zone is positioned at around $103,991, where selling pressure has historically been significant. BTC has struggled to break past this level, making it a major resistance to watch.

BTC Price Performance. Source: TradingView

From a price action perspective, BTC has been forming lower highs and lower lows, suggesting a short-term bearish trend. However, the recent price movement hints at a possible reversal, as BTC is attempting to bounce off its demand zone.

The volume profile also shows significant trading activity near $103,991, reinforcing the resistance level. Meanwhile, a noticeable low volume area near $91,000 suggests that if BTC breaks below this level, a sharp drop could follow due to the lack of strong support.

Meanwhile, the Relative Strength Index (RSI) is currently at 50.84, indicating neutral momentum. While BTC is not overbought or oversold, the RSI’s slight upward trend could signal growing buying interest.

If Bitcoin holds above the $93,700 support zone, it may attempt a push towards the $100,000 milestone. However, a breakdown below $91,000 could trigger a move lower, potentially testing the $88,000 to $85,000 range.

Source