Crypto Market Braces for $5.2 Billion in BTC and ETH Options Expiry This Week

BTC and ETH Options Expiry: Potential Market Volatility Looms

The monthly contracts for Bitcoin and Ether options are scheduled to expire on Friday, which could cause some short-term volatility in the cryptocurrency market this week. At 8:00 UTC on Deribit, options contracts for Bitcoin and Ethereum valued at $4.2 billion and $1 billion, respectively, will expire.

Deribit data shows that approximately $682 million worth of BTC options, or 16.3% of the total of $4.2 billion, are scheduled to expire “in-the-money,” with calls making up the majority of these options. When holders of in-profit ITM options seek to shift positions or close their bets in the upcoming expiration, the dynamic may cause market volatility. The open interest distribution for the most recent quarterly expiry, which was at the end of September, was comparable.

BTC Trading Above $67K, Maximum Pain Theory Suggests Potential Drop to $64K

The maximum pain level for Bitcoin is $64,000, at which point the majority of options would expire worthless, resulting in the greatest loss for option purchasers and the most profit for option writers. At the time of publishing, ether was trading at about the $2,600 maximum pain level, while BTC was trading close to $67,000, much above the maximum pain level. Therefore, proponents of the maximum pain theory may argue that while Ethereum’s downside is limited, Bitcoin has room to decline before the expiration.

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