$10 Billion in Bitcoin and Ethereum Options Set to Expire Amid Market Uncertainty

The cryptocurrency market is bracing for heightened volatility as over $10 billion worth of Bitcoin and Ethereum options contracts were set to expire today, a development that could influence short-term price movements.

More than 80,000 Bitcoin options contracts, with a total notional value of approximately $8.36 billion, will expire alongside 603,400 Ethereum contracts, collectively worth $1.94 billion. Bitcoin’s maximum pain price stands at $98,000 and Ethereum at $3,300. Traders and analysts are closely monitoring price action as expiration nears.

The put-to-call ratios for these contracts indicate a bullish sentiment, with Bitcoin at 0.68 and Ethereum at 0.43. A ratio below one generally suggests that more traders are holding long positions rather than short ones. However, such sentiment does not guarantee stability, as options expiry often triggers market fluctuations.

Bitcoin’s Potential Price Movement

Source: Data from Deribit on Options Expiration of Bitcoin Futures

Bitcoin has rebounded from a brief decline following the Federal Open Market Committee (FOMC) meeting, where it dipped below $100,000 before stabilizing between $104,000 and $106,000. The highest open interest strike price for Bitcoin options is $120,000, amounting to $2.4 billion, with another $1.65 billion in contracts at the $110,000 strike price. This suggests that significant capital is positioned for potential upward movement.

With the options expiry today, Bitcoin’s price trajectory may experience increased volatility as traders adjust their positions. Historically, large-scale expirations have led to short-term price swings as market participants react to liquidation events and hedging strategies.

Ethereum’s Market Outlook

Source: Data from Deribit on Options Expiration of Ethereum Futures

Ethereum’s price has fluctuated around $3,200 following a drop to $3,000 earlier this week. With a put-to-call ratio of 0.43, a generally bullish outlook persists, though the expiration of nearly 603,400 contracts today could introduce market turbulence. On-chain indicators, such as the Ethereum MVRV ratio, suggest a potential price correction, adding another layer of uncertainty.

In addition to the options expiration, investors are keeping a close watch on macroeconomic factors. The upcoming U.S. Personal Consumption Expenditures (PCE) index report, often used as an inflation gauge, is expected to have a minor impact on cryptocurrency volatility. However, the more significant catalyst may be next week’s U.S. labor market data release, which has historically influenced market sentiment.

Crypto analyst Benjamin Cowen has emphasized that the unemployment rate will be a key factor in determining Bitcoin’s direction. He noted that if the rate reaches 4.1% or 4.2%, Bitcoin could mirror its past performance with gains in February and March.

Source: Benjamin Cowen on X

However, a higher unemployment rate could introduce further uncertainty, potentially stalling Bitcoin’s momentum.

Market Reaction and Expectations

Bitcoin’s current trading price of around $104,500 indicates a relatively stable stance post-FOMC, though the looming options expiration could shift market dynamics. Ethereum, up 1.67% at $3,244, remains subject to potential price swings as traders navigate today’s expiration event.

Historically, options expirations tend to cause temporary volatility, followed by a stabilization period as traders reposition. The max pain theory suggests that prices may gravitate toward levels where most options expire worthless, causing losses for option buyers while benefiting sellers. This is a common pattern observed in both traditional finance and cryptocurrency derivatives markets.