Crypto Market Braces for Volatility as $2.27 Billion in Bitcoin and Ethereum Options Expire

The cryptocurrency market is on high alert as a massive $2.27 billion in Bitcoin and Ethereum options are set to expire today, potentially triggering short-term price volatility and impacting traders’ profitability. This significant event could be a turning point for the market, and investors are eagerly watching to see how it will unfold.

Whales Accumulate Bitcoin

According to data from Deribit, 19,364 Bitcoin options will expire today, with a put-to-call ratio of 0.65 and a maximum pain point of $97,000. This suggests a generally bullish sentiment among investors, despite Bitcoin’s ongoing decline from the $100,000 mark. The put-to-call ratio indicates that more investors are betting on Bitcoin’s price to rise, rather than fall.

Ethereum Options Expiration

In addition to Bitcoin, 141,185 Ethereum options will also expire today, with a put-to-call ratio of 0.48 and a maximum pain point of $3,450. This could influence Ethereum’s short-term price movement, as investors adjust their positions to maximize their gains.

Price Movement and Volatility

As the options contracts near expiration, Bitcoin and Ethereum prices are expected to approach their respective maximum pain points. According to BeInCrypto data, Bitcoin was trading at $93,792, while Ethereum was exchanging hands for $3,258. This suggests that prices might rise as smart money aims to move them toward the “max pain” level, according to the Max Pain theory.

Analysts Divided on Market Direction

Analysts remain divided about the next directional bias for Bitcoin’s price. While some hope for further upside, others bet on downside if the support around $92,000 breaks. Glassnode indicates a weakening of short-term demand momentum in the market, with a 66.7% decline in hot capital from its December 12 peak.

Weakening Demand Momentum

The decline in hot capital implies a steep drop in speculative activity, with traders pulling back and indicating waning confidence or interest in short-term trading opportunities. This makes it more challenging for large trades to occur without impacting prices, potentially leading to increased volatility.

Conclusion

The expiration of $2.27 billion in Bitcoin and Ethereum options is a significant event that could trigger short-term price volatility and impact traders’ profitability. While analysts are divided on the market direction, the decline in hot capital and weakening demand momentum suggest that the market may be due for a correction. As the options contracts expire, investors will be watching closely to see how the market reacts and whether it will be a breakout or another consolidation.

Disclaimer

In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content.

Source: Beincrypto.com

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