Market
Crypto Markets Eye $1.6 Billion Options Expiration: What’s Next?
Crypto markets will witness $1.61 billion in Bitcoin and Ethereum options contracts expire today. The massive expiration could cause a short-term price impact, particularly after Bitcoin briefly broke below $60,000.
With Bitcoin options valued at $1.10 billion and Ethereum at $510.08 million, traders are bracing for potential volatility.
Why Bitcoin and Ethereum Could See Volatility Today
There is a significant increase in Bitcoin (BTC) and Ethereum (ETH) contracts due for expiry today compared to last week. Data on Deribit shows 18,271 Bitcoin options contracts will expire with a put-to-call ratio of 0.90 and a maximum pain point of $62,000.
Regarding Ethereum, 212,175 contracts are due for expiry today, with a put-to-call ratio of 0.40 and a maximum pain point of $2,450.
Read more: An Introduction to Crypto Options Trading.
For Bitcoin, the expiring options suggest a generally bullish sentiment after it briefly slipped below $60,000. With a maximum pain point of $62,000, the pioneer crypto, now trading for $60,612 per share, stands well below its strike price. On the other hand, Ethereum is trading for $2,407, which is also below its maximum pain price of $2,450.
The maximum pain point is a crucial metric that often guides market behavior. It shows where the expiry will cause the greatest financial loss to all option holders that have entered into a contract at that strike rate at expiration.
“Keep an eye on the ratios and max pain levels. They might tell us where the market is leaning,” analysts at Crypto Town Hall suggested.
Bitcoin, Ethereum Trade Below Max Pain Price
As Bitcoin (BTC) and Ethereum (ETH) options near expiration both assets are expected to approach their respective strike prices. This is a result of the Max Pain theory, which predicts that options prices will converge around the strike prices where the largest number of contracts — both calls and puts — expire worthless.
Large institutions, often referred to as smart money, typically sell these options. They have an incentive to push the price toward the “max pain” level by trading in the spot or futures markets. This strategy causes option buyers, who are their counterparties, to lose the most value.
Heading into the expiry, both Bitcoin and Ethereum could gravitate toward these max pain points. The pressure on prices, however, will fade after the options expire, with Deribit expected to settle contracts at 08:00 UTC on Friday.
Currently, buyers of put options on BTC and ETH seem poised to benefit. With the current market underperforming, option sellers will likely push prices upward to reduce their losses. An in-the-money put means the current asset price is below the strike price, enabling holders to sell at a better rate than the market offers.
Read more: 9 Best Crypto Options Trading Platforms.
Analysts at Greeks.live advise traders to stay alert, as this market shift could open up new trading opportunities. Recent sector weakness could create favorable conditions for strategic moves.
The analysts also note that the recent market lull led to Bitcoin showing flat implied volatility (IV). This is ideal for building some medium — to long-term calls at a low level. Further, block call trading (large buy or sell orders that often indicate what an institution is doing to its portfolio) has been progressively more active this week.
“With crypto continuing to weaken the key $60,000 level now hotly contested, and ETH near the long-term support line of $2,300, a market change could be just around the corner. The first two weeks of the fourth quarter of this year were poor; the options market is also more depressed. The current options position has fallen to a new low since 2023. But a sluggish market also breeds new trading opportunities,” the analysts noted.
Options expirations often cause short-term price fluctuations, creating market uncertainty. However, markets usually stabilize soon after as traders adapt to the new price environment. With today’s high-volume expiration, traders and investors can expect a similar outcome, potentially influencing future crypto market trends.
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Ethereum price extended losses and tested the $2,320 support. ETH is now correcting losses and might aim for a fresh increase above the $2,420 resistance.
- Ethereum remained in a bearish zone and traded below the $2,360 zone.
- The price is trading below $2,420 and the 100-hourly Simple Moving Average.
- There is a connecting bearish trend line forming with resistance at $2,420 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair must stay above the $2,350 support level to start decent increase in the near term.
Ethereum Price Aims Upside Break
Ethereum price failed to start a fresh increase above the $2,450 resistance zone. ETH remained in a bearish zone like Bitcoin and traded below the $2,365 support zone.
There was also a move below the $2,350 level. The price tested the $2,320 support zone. A low was formed at $2,329 and the price is now rising. There was a move above the $2,350 and $2,365 levels. The price climbed above the 23.6% Fib retracement level of the downward wave from the $2,468 swing high to the $2,329 low.
Ethereum price is now trading below $2,420 and the 100-hourly Simple Moving Average. On the upside, the price seems to be facing hurdles near the $2,420 level. There is also a connecting bearish trend line forming with resistance at $2,420 on the hourly chart of ETH/USD.
The trend line is close to the 61.8% Fib retracement level of the downward wave from the $2,468 swing high to the $2,329 low. A clear move above the $2,420 resistance might send the price toward the $2,450 resistance.
An upside break above the $2,420 resistance might call for more gains in the coming sessions. In the stated case, Ether could rise toward the $2,500 resistance zone in the near term. The next hurdle sits near the $2,550 level or $2,560.
More Losses In ETH?
If Ethereum fails to clear the $2,420 resistance, it could start another decline. Initial support on the downside is near the $2,380 level. The first major support sits near the $2,350 zone.
A clear move below the $2,350 support might push the price toward $2,320. Any more losses might send the price toward the $2,265 support level in the near term. The next key support sits at $2,220.
Technical Indicators
Hourly MACD – The MACD for ETH/USD is gaining momentum in the bullish zone.
Hourly RSI – The RSI for ETH/USD is now above the 50 zone.
Major Support Level – $2,320
Major Resistance Level – $2,420
XRP price is moving higher from the $0.5220 support. The price could gain bullish momentum if it clears the $0.5360 and $0.5450 resistance levels.
- XRP price is slowly moving higher above the $0.5320 support.
- The price is now trading above $0.5340 and the 100-hourly Simple Moving Average.
- There is a connecting bullish trend line forming with support at $0.5280 on the hourly chart of the XRP/USD pair (data source from Kraken).
- The pair could gain bullish momentum if it clears the $0.5360 and $0.5450 resistance levels.
XRP Price Aims Higher
XRP price remained stable above the $0.5220 support, unlike Bitcoin and Ethereum. A base was formed and the price started a fresh increase above $0.5350.
There was a test of the $0.5450 resistance before the price dipped back to $0.5240. A low was formed at $0.5239 and the price is again rising. There was an increase within a range and the price climbed above the $0.5320 resistance.
The price cleared the 50% Fib retracement level of the recent decline from the $0.5439 swing high to the $0.5239 low. The price is now trading above $0.5320 and the 100-hourly Simple Moving Average. There is also a connecting bullish trend line forming with support at $0.5280 on the hourly chart of the XRP/USD pair.
On the upside, the price might face resistance near the $0.5360 level. It is close to the 61.8% Fib retracement level of the recent decline from the $0.5439 swing high to the $0.5239 low.
The first major resistance is near the $0.5420 level. The next key resistance could be $0.5450. A clear move above the $0.5450 resistance might send the price toward the $0.5500 resistance. Any more gains might send the price toward the $0.5680 resistance or even $0.5750 in the near term. The next major hurdle might be $0.600.
Another Decline?
If XRP fails to clear the $0.5360 resistance zone, it could start another decline. Initial support on the downside is near the $0.5285 level. The next major support is near the $0.5240 level.
If there is a downside break and a close below the $0.5220 level, the price might continue to decline toward the $0.5120 support in the near term. The next major support sits near the $0.5050 zone.
Technical Indicators
Hourly MACD – The MACD for XRP/USD is now gaining pace in the bullish zone.
Hourly RSI (Relative Strength Index) – The RSI for XRP/USD is now above the 50 level.
Major Support Levels – $0.5285 and $0.5220.
Major Resistance Levels – $0.5360 and $0.5450.
Solana tested the $135 support and recently corrected losses. SOL price is rising and might gain bullish momentum if it clears the $144 resistance.
- SOL price is attempting a fresh increase from the $135 zone against the US Dollar.
- The price is now trading below $145 and the 100-hourly simple moving average.
- There was a break above a key bearish trend line with resistance at $139 on the hourly chart of the SOL/USD pair (data source from Kraken).
- The pair could gain bullish momentum if it breaks the $145 resistance zone.
Solana Price Aims Higher
Solana price climbed above the $146 and $148 levels before the bears appeared. SOL traded as high as $152 and recently saw a fresh decline like Bitcoin and Ethereum.
The price declined below the $145 and $140 support levels. A low was formed at $135.39 and the price is now rising. There was a decent move above the $140 level. The price climbed above the 23.6% Fib retracement level of the downward move from the $152 swing high to the $135.39 low.
There was a break above a key bearish trend line with resistance at $139 on the hourly chart of the SOL/USD pair. Solana is now trading below $145 and the 100-hourly simple moving average.
On the upside, the price is facing resistance near the $144 level. It is close to the 50% Fib retracement level of the downward move from the $152 swing high to the $135.39 low. The next major resistance is near the $146 level. The main resistance could be $150.
A successful close above the $150 and $152 resistance levels could set the pace for another steady increase. The next key resistance is near $162. Any more gains might send the price toward the $175 level.
Another Decline in SOL?
If SOL fails to rise above the $144 resistance, it could start another decline. Initial support on the downside is near the $138 level. The first major support is near the $134 level.
A break below the $135 level might send the price toward the $132 zone. If there is a close below the $132 support, the price could decline toward the $120 support in the near term.
Technical Indicators
Hourly MACD – The MACD for SOL/USD is gaining pace in the bullish zone.
Hourly Hours RSI (Relative Strength Index) – The RSI for SOL/USD is above the 50 level.
Major Support Levels – $138 and $135.
Major Resistance Levels – $144 and $150.
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