How will the expiration of options worth $3 billion affect the price of bitcoin (BTC) and Ethereum (ETH)?

Today, options on Bitcoin BTCUSD and Ethereum ETHUSD are expiring for a total amount of about $3 billion.

Let’s understand how the expiration of options will affect the short-term price dynamics of the two largest cryptocurrencies by market capitalization.

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Analysis of expiring options on BTC and ETH

According to Deribit, today marks the expiration of 25,925 Bitcoin option contracts worth $2.6 billion. The maximum pain point for these contracts is at $94,000, and the put-to-call ratio is 1.05.

Today also marks the expiration of 164,591 options contracts on Ethereum with a nominal value of $364 million. The maximum pain point for ETH options is $1,850, and the put-to-call ratio is 1.43.

In options trading, the point of maximum pain refers to the price level at which cryptocurrency holders will incur the largest losses. The put-to-call ratio assesses which sentiments prevail among investors. A higher ratio indicates that market participants are optimistic and betting on rising prices for BTC and Ethereum.

According to the theory of maximum pain points in options trading, cryptocurrencies often gravitate towards their strike prices, at which the largest number of contracts ( both calls and puts ) expire worthless. According to CoinMarketCap, at the time of writing, BTC is trading at $103,053, while ETH is at $2,240.

What experts say

Analysts at Greeks.live note that bears currently dominate the market. A put-to-call ratio above 1 indicates that there are more bets on decline than on growth. The largest volume of Bitcoin options is concentrated below $100,000, which indicates traders’ readiness for a correction. The situation for Ethereum is similar.

According to experts, the market will be extremely volatile over the upcoming weekend. It is expected that the authorities of China and the USA will meet in Switzerland to discuss trade tariffs. Previously, Trump imposed tariffs of 145% on imports of goods from Beijing. Chinese authorities stated that they will not allow such pressure and will defend their interests.

“If the United States does not cancel its erroneous unilateral tariff measures, it will demonstrate a complete lack of sincerity and further undermine mutual trust in any potential dialogue or negotiations. If one speaks one way but acts another, or even attempts to use negotiations as a cover for coercion and blackmail, it will not work with China,” the Chinese embassy in the U.S. stated.

The short-term trend of BTC will depend on the meeting. If the negotiations fail, the price of Bitcoin may retreat to the range of $90,000-93,000. With a positive outcome, there is a chance that the cryptocurrency’s rate will bounce back to $105,000–110,000.

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