In a tweet that sent shockwaves through the cryptocurrency community, Greeks.live reported that approximately $1.4 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire in the coming days. The revelation comes as the cryptocurrency market experiences a significant drop in volatility, sparking concerns and speculation among traders.
According to Greeks.live, a leading options analytics platform, a staggering 22,000 Bitcoin options with a total notional value of $890 million are nearing expiry. The Put Call Ratio (PCR) for these Bitcoin options stands at 1.1, an unusual occurrence in the current bull market. Additionally, the Maxpain point, the price at which the total value of all options would be minimized, is reported to be $44,000.
In the Ethereum market, Greeks.live highlighted that 211,000 ETH options, valued at $520 million, are set to expire soon. The PCR for Ethereum options is notably lower at 0.55, indicating a more bullish sentiment compared to Bitcoin. The Maxpain point for ETH options is reported to be around the $2,500 level.
The Bitcoin ETF Impact
The market’s attention has been drawn to the impact of the recently approved Bitcoin spot exchange traded funds (ETFs), which received regulatory approval from the U.S. Securities and Exchange Commission (SEC) on January 10. Despite initial optimism surrounding the ETF, the market has witnessed a decline in volatility, causing the major term Implied Volatilities (IVs) to drop sharply. The Maxpain point is now closely aligned with the delivery price for the first time this year.
The PCR reaching 1.1 for Bitcoin options suggests that bearish forces have prevailed in the market this week, marking a significant deviation from the prevailing bullish sentiment. The passage of the Bitcoin spot ETF is anticipated to bring incremental capital to the crypto market in the long run. The interaction between the selloff in grayscale and the support from other ETFs is seen as a crucial factor shaping market dynamics.
Analysts point out that the next significant development could be a “halving of the hype,” signaling a potentially bullish tone for the remainder of the year. As of the latest update, the current price of Bitcoin is $41,424, reflecting a 2.67% decrease in the last 24 hours and a 9.59% drop in the last 7 days. Meanwhile, Ethereum is currently priced at $2,486, exhibiting a 1.17% decrease in the last 24 hours and a 4.01% decline in the last 7 days.
The crypto community is closely watching the expiration of these options with investors wondering which is the best crypto to buy now, as it could have profound implications for the market’s near-term direction. With the unprecedented circumstances surrounding the options expiry and the evolving dynamics of the cryptocurrency landscape, traders and investors are bracing for heightened volatility in the days ahead.
