BTC & ETH options expiry triggers $2.63B shakeup amid market pullback

• Bitcoin’s $2.04 billion options expired with a max pain of $101K, trading now at $95,202.
• Ethereum faces sharper declines, losing 10.5% in a day, below its $3,750 max pain level.

The crypto market is seeing heightened activity following the expiry of major Bitcoin [BTC] and Ethereum [ETH] options contracts. 

On 20th December, 21,000 BTC options expired with a notional value of $2.04 billion, while 173,000 ETH options expired with a notional value of $590 million. 

Bitcoin’s Put-Call Ratio stood at 0.87, suggesting a leaning toward bullish sentiment, while Ethereum’s lower Put-Call Ratio of 0.5 reflected stronger optimism among traders.

The max pain point for Bitcoin was $101,000, while Ethereum’s was $3,750. With Bitcoin currently trading at $95,202.42 and Ethereum at $3,289.44, both assets remain below their max pain levels. 

Such expirations often result in short-term volatility, with traders adjusting positions as markets stabilize post-expiry.

Market declines continue for BTC and ETH

Bitcoin has fallen by 6.41% in the past 24 hours, with a 7-day decline of 5.10%, pushing its market cap to $1.88 trillion. Ethereum has seen a sharper drop, losing 10.50% in 24 hours and 15.61% over the week, bringing its market cap to $396.41 billion. 

Bitcoin’s failed attempt to break $110,000 and the ongoing correction have pressured prices.

According to a recent AMBCrypto report, the expiration of Bitcoin and Ethereum options contracts worth $3 billion earlier this month drove notable market activity.

At that time, Bitcoin had $2.1 billion in options expiring, with a Put-Call Ratio of 0.83 and a max pain point of $98,000. 

These expirations contributed to the current trends observed in the market.

Increased ETF outflows and options activity

With the approach of Christmas and year-end deliveries, ETFs are seeing heightened outflows, further contributing to market movements.

Market makers have also adjusted positions to align with the high volume of expiring options, and block call options have accounted for over 30% of daily trading recently.

The expiration of over 40% of crypto options at year-end is expected to reduce implied volatility significantly. Traders are monitoring these conditions closely, as lower volatility could make options trading more affordable in the short term. 

“The saving grace could be just tons of options expiring worthless tomorrow,” one user on X commented.

Bitcoin’s price is stabilizing near $95,000 after falling below the $100,000 milestone for the first time in two weeks. Analysts expect potential recovery toward $100,000 as the market adjusts to post-expiry dynamics.

Ethereum remains below its max pain point of $3,750, trading at $3,289.44. While the broader correction has impacted both assets, historical patterns suggest stabilization in the coming sessions as traders adapt to new price levels.