The recent expiration of major Bitcoin and Ethereum options contracts has sent ripples through the crypto market, with both assets trading below their respective max pain levels. Bitcoin’s $2.04 billion options expired with a max pain of $101,000, while Ethereum faced sharper declines, losing 10.5% in a day, below its $3,750 max pain level.
The expiration of 21,000 BTC options and 173,000 ETH options with notional values of $2.04 billion and $590 million, respectively, has led to increased volatility in the market. Bitcoin’s Put-Call Ratio of 0.87 indicates a bullish sentiment, while Ethereum’s lower Put-Call Ratio of 0.5 reflects stronger optimism among traders.
Currently, Bitcoin is trading at $95,202.42, and Ethereum at $3,289.44, both below their max pain levels. Such expirations often result in short-term volatility as traders adjust their positions post-expiry.
In terms of market performance, Bitcoin has seen a 6.41% decline in the past 24 hours and a 7-day decline of 5.10%, pushing its market cap to $1.88 trillion. On the other hand, Ethereum has experienced a sharper drop, losing 10.50% in 24 hours and 15.61% over the week, bringing its market cap to $396.41 billion.
The recent market declines can be attributed to Bitcoin’s failed attempt to break $110,000 and ongoing corrections. The expiration of Bitcoin and Ethereum options contracts worth $3 billion earlier this month also played a significant role in driving market activity.
As Christmas and year-end deliveries approach, ETFs are experiencing heightened outflows, further impacting market movements. Market makers have adjusted their positions to align with expiring options, with block call options accounting for over 30% of daily trading volume.
The expiration of over 40% of crypto options at year-end is expected to reduce implied volatility significantly, making options trading more affordable in the short term. Bitcoin’s price is currently stabilizing near $95,000, while Ethereum remains below its max pain point of $3,750, trading at $3,289.44.
Analysts anticipate a potential recovery towards $100,000 for Bitcoin as the market adjusts to post-expiry dynamics. Similarly, historical patterns suggest stabilization in the coming sessions for Ethereum as traders adapt to new price levels.