18,000 BTC and 270,000 ETH options expire, what’s next?
On April 5, 18,000 Bitcoin (BTC) and 270,000 Ethereum (ETH) options will expire. The notional value of Bitcoin and Ethereum contracts is 1.2 billion dollars and 890 million dollars.
Will this deadline increase volatility in the market and affect the price of the two largest cryptocurrencies by market capitalization?
Bears dominate the Crypto options market.
It is important to understand that crypto options allow traders to buy or sell an asset on a specific date. This feature gives flexibility to the owner. Unlike futures, they have no obligation to buy or sell.
According to data from Greeks.live, Bitcoin's call ratio is currently at 0.64. The maximum pain point for Bitcoin is $68,000, which means that this price can cause significant financial losses for a large number of owners. Similarly, Ethereum's call ratio is 0.8, and its maximum pain point is $3,400.
“The crypto market was weak this week, the $70,000 game ended with a short seller winning, and selling calls became the main trade of the week, IVs showed a sharp decline in all major terms,” wrote Greek analysts.
Read more: Introduction to Crypto Options Trading
This week has been tough for Bitcoin. As BeInCrypto previously reported, the price of BTC failed to stay above $70,000 and fell below $65,000. At the time of writing, BTC is trading at $67,500.
Ethereum showed similar dynamics earlier this week with its price dropping below $3,250.
In addition, analysts say that Bitcoin will be cut in half due to sentiment support. Meanwhile, other coins have fallen into a short-term bear market, and recent ETF inflows have slowed as the market grinds out premiums from ETFs.
Read more: 9 Best Crypto Options Trading Platforms
It is very difficult to predict how the market will behave on the day when many contracts expire, especially if any events affect the news background. Still, traders should monitor the situation closely to ensure that increased volatility does not lead to unwanted stop orders or poor trading decisions.
However, market participants should remember that the effect of option expiration on the asset price is short-term.
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