Bitcoin and Ethereum Options Expiry: Bulls and Bears Battle as BTC and ETH Surge

Bitcoin and Ethereum Options Expiry: Bulls and Bears Battle as BTC and ETH Surge

As Friday approaches, the cryptocurrency market is bracing for the expiration of a significant number of Bitcoin and Ethereum options, setting the stage for a tight contest between bullish and bearish forces. Interestingly, both BTC and ETH entered a robust rally just a day before the options expiry, with Bitcoin gaining 7% and Ethereum jumping 10%.

Bitcoin Options Expiry

According to data from Deribit, 32,000 BTC options contracts are scheduled to expire today, with a put-call ratio of 0.71. The notional value of these contracts stands at $1.943 billion, with the max pain point—where the most losses would be incurred by option holders—set at $60,000.

Last week’s rate hike by the Bank of Japan triggered significant volatility in the crypto market, causing Bitcoin’s price to dip below $50,000 earlier this week. However, as the Bank of Japan indicated it might take a more dovish stance if market instability worsens, Bitcoin staged a powerful recovery, surging by 20% in just four days to trade above $61,000.

Although implied volatility (IV) has decreased considerably, it remains elevated compared to pre-crash levels. The persistent market volatility has made it difficult for IVs to decline quickly over a short period.

A report from Grayscale Research highlights that if the U.S. economy can avoid a recession and achieve a “soft landing,” we could see token valuations rebound, potentially pushing Bitcoin back to its all-time high by year-end. The report also notes that with little tolerance for a deep economic downturn, the Federal Reserve might pivot to cutting rates at the first sign of significant trouble.

Ethereum Options Expiry

On the Ethereum front, 206,000 ETH options are set to expire today, with a put-call ratio of 0.96, a notional value of $560 million, and a max pain point at $2,950. The put-call ratio near 1 indicates an intense battle between bulls and bears.

Over the last 24 hours, Ethereum has experienced a strong rebound, climbing 10.70% to reach $2,700. Technical charts suggest that ETH could further extend its rally, with the next target at $2,820.

During the recent market downturn, Ethereum ETFs showed considerable resilience but have seen outflows as the market started to recover over the past two days.