The cryptocurrency market may be preparing for more volatility, with Bitcoin and Ethereum options worth a staggering $5.78 billion set to expire today.
Since the beginning of this week, the cryptocurrency market has experienced intense and rapid price movements, particularly to the downside. Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, have led this charge, yielding 18% and 24% respectively.
At the same time, the market is witnessing further swift price developments, with options worth an astounding $5.78 billion set to expire. This is particularly intriguing as the maximum pain points of these expiring options contracts are in the opposite direction of the market’s primary trend.
Bitcoin options valued at $4.66 billion are running their course.
Data from Greeks.live indicates that today there are 59,000 BTC options expiring. The call ratio for these contracts is 0.7, indicating a somewhat neutral market disposition, with a maximum pain point at $96,000.
Interestingly, the maximum pain highlights the price at which most options will expire worthless, with $96,000 suggesting that most call options were betting on lower prices. Notably, the pain price mark is over 17% away from the current market price, a gap that market makers may wish to close to reduce cash flow.
Ethereum options valued at $1.12 billion are also set to expire.
Meanwhile, 529,000 ETH options with a conceptual value of $1.12 billion will expire alongside the Bitcoin contracts. The maximum pain point for these options is at $3,000, with a call ratio of 0.52 indicating a relatively bullish stance, 36% away from Ethereum’s current price.
Whether market makers can resist the bearish pressure and push prices toward the pain points remains to be seen. Nevertheless, Greeks.live indicates that since last month, the volume of options traded has increasingly skewed short, with smart money traders winning the bets once again.
Market Panic Peaks Volatility
Additionally, analysis from Greeks.live shows that market volatility has widened amid the sluggishness of U.S. stocks and bonds. Notably, the primary catalyst for this panic has stemmed from updates on tariff rates from U.S. President Donald Trump affecting major countries such as China, Canada, and Mexico.
Following the market crash, implied volatility (IV) spiked for both Bitcoin and Ethereum. Bitcoin’s short-term volatility soared to 90% at some point during the week, while Ethereum’s short-term volatility exceeded 100%.
Despite this, the market seems to have stabilized, with Bitcoin recovering to $82,000 and Ethereum to $2,170. The intraday lows for the pair were $78,179 and $2,073.
