The recent expiration of major Bitcoin and Ethereum options contracts has sparked increased activity in the cryptocurrency market. On December 20th, a total of 21,000 BTC options with a notional value of $2.04 billion expired, along with 173,000 ETH options worth $590 million. This has led to short-term volatility as traders adjust their positions post-expiry.
Bitcoin’s Put-Call Ratio of 0.87 suggests a bullish sentiment, while Ethereum’s lower ratio of 0.5 indicates stronger optimism among traders. The max pain levels for Bitcoin and Ethereum were $101,000 and $3,750 respectively. Currently, Bitcoin is trading at $95,202.42 and Ethereum at $3,289.44, both below their max pain levels.
The market has witnessed continued declines, with Bitcoin falling by 6.41% in the past 24 hours and Ethereum experiencing a sharper drop of 10.50%. Bitcoin’s market cap now stands at $1.88 trillion, while Ethereum’s market cap is at $396.41 billion. Bitcoin’s unsuccessful attempt to break $110,000 and the ongoing correction have put pressure on prices.
Market outflows from ETFs have also contributed to the market movements, with market makers adjusting their positions to align with the expiring options. Over 30% of daily trading has been attributed to block call options, and the expiration of over 40% of crypto options at year-end is expected to reduce implied volatility significantly.
Bitcoin’s price is currently stabilizing around $95,000 after dropping below the $100,000 milestone for the first time in two weeks. Analysts anticipate a potential recovery towards $100,000 as the market adapts to post-expiry dynamics. Ethereum, on the other hand, remains below its max pain level of $3,750, trading at $3,289.44. Despite the broader correction, historical patterns suggest stabilization in the coming sessions as traders adjust to the new price levels.
In conclusion, the expiration of major options contracts has played a significant role in shaping the current trends in the cryptocurrency market. Traders are closely monitoring market conditions as they anticipate further adjustments in the post-expiry period.