BTC and ETH Options Expiry: Implications for Traders and Market Volatility

2024-05-03 13:06:55

• BTC and ETH were trading below their maximum pain points, suggesting that traders might face serious losses.
• Implied volatility fell, suggesting a lack of bullish expectations going forward.

bitcoins [BTC] y Ethereum [ETH] About $2.3 billion worth of options contracts will expire on Friday, March 3. May. According to Deribit Exchange, Bitcoin options are valued at $1.35 billion. ETH contracts, on the other hand, are worth $990 million. The value of these contracts appears to be lower than the figure AMBCrypto reported last week: $9.3 billion.

He decline can be attributed to the price action of both cryptocurrencies. For most of the week, BTC and ETH recorded sharp declines before the recent strengthening. As a result, traders have been wary of opening multiple positions.

At the time of writing, Bitcoin’s bid/ask ratio (PCR) was 0.50. This ratio measures the general mood of the market. A PCR greater than 1 suggests that traders are buying more puts than calls, a sign of bearish sentiment.

Anarchy looms as traders prepare for results

However, if the PCR is less than 0.70, it implies more buying options than selling, which means the broader sentiment is bullish. Simply put, the reading suggests that traders expect Bitcoin to end the week stronger than it started.

For Bitcoin, the maximum pain point was $61,000 on the charts. This means that if Bitcoin falls to this price, most options traders will suffer heavy losses.

In the case of Ethereum, the PCR was 0.37, meaning there were more bullish bets than bearish bets. The maximum weak point for ETH was $3000. As such, traders may have to wait for altcoins to trade above this level

before the day is over.

At the time of this publication, both Bitcoin and Ethereum were valued at levels below the peak of pain. If this remains the case when the contracts expire, the day might be “red” for many traders.

There are a few reasons why BTC and ETH might end the week on a bearish note. Greeks.live, the remarkable options trading on X, explained,

“Hong Kong ETF listing failed to generate much incremental volume, US BTC ETF continued to exit, market weakness led to weakened market sentiment. The current point of sustained sideways trading is unlikely; no decline will surely be a relief to the downside, the giant whale of a lack of confidence in the market.”

Volatility Fall: Will BTC and ETH Follow?

Additionally, AMBCrypto analyzed Bitcoin’s Implied Volatility (IV). IV shows the level of trust in the market and whether it would be a good idea to buy put/call options in the future.

If IV increases, market participants are uncertain regarding where prices may move next. However, if the metric drops, it means that traders are not willing to pay an additional fee to hedge their existing positions.

Given the price of Bitcoin and ETH, IV denied

suggested that traders were unsure that their bullish efforts would pay off.

File Bitcoins [BTC] Price prediction 2023-2024

If this sentiment holds true, the ETH price might fall below $2,900 once more. For BTC, it may start trading once more at a value below $59,000.

Next: Bitcoin Miner Hangover Halves – Here’s What Stronghold Does

This is an automatic translation of our English version.

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