The cryptocurrency market is expecting volatility today as $1.87 billion worth of Bitcoin and Ethereum options are set to expire in a few hours.
Data from The Greeks live Investors reported that 24,000 BTC options, with a nominal value of $1.4 billion, a put/call ratio of 0.83, and a maximum tolerance threshold of $59,500, are about to expire. This indicates that investors are betting on Bitcoin to support the downtrend.
Additionally, approximately 184,000 ETH options, which have a notional value of $470 million, a put/call ratio of 0.8, and a maximum pain point of $2,650, are scheduled to be issued today. The put/call ratio implies bearish sentiment among traders, as Ethereum has fallen more than 25% over the past month.
With $1.87 billion worth of options expiring today, historical statistics suggest impending market volatility. Prices typically trend toward the point of maximum pain, where the value of open calls and puts is minimized. This will inflict maximum losses on traders and reduce payouts to sellers.
With options set to expire at 08:00 UTC, the market could see some volatility. Bitcoin is trading at $58,506, which is 1.7% away from the option’s maximum pain point. Additionally, Ethereum is trading at $2,626 and needs to move 0.9% to incur a maximum loss on bearish options traders.
Options volume continues to decline
It is worth noting that options expiring on August 16 represent about 10% of total trading positions and over 20% of positions expiring in the remainder of the year. Positions expiring this week are lower than those $2.46 billion notional value options that expired earlier in the month.
Options data also showed an even distribution of options terms and a strong term structure, indicating lower expectations for further market volatility. With the options market reducing expectations for market volatility, cryptocurrencies could soon enter a period of stability.
Disclaimer: This content is informational and should not be considered financial advice. The opinions expressed in this article may include the personal opinions of the author and do not reflect the opinion of The Crypto Basic. Readers are encouraged to conduct thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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