21,000 Bitcoin contracts and 230,000 Ethereum contracts expire today. The total value of the expiring options exceeds $2.3 billion. How will the event affect the price of the two largest cryptocurrencies by market capitalization?
Cryptocurrency options are financial instruments that give investors the right, but not the obligation, to buy or sell a specific amount of cryptocurrency at a certain price (strike price) before a specific expiration date.
Unlike futures, which require the position to be closed regardless of the outcome, cryptocurrency options offer greater flexibility to the investor, since they can decide whether to execute the option or not based on market conditions.
Bitcoin Options Expiration: High Pain Point at $69,000
Meanwhile, Ethereum’s put/call ratio is 0.49, and the maximum pain point for ETH is at $3.425.
“Volatility levels in the cryptocurrency market have increased significantly this week, with $70,000 and $3,500 in play, but IVs have seen significant drops across all major terms, with put calls being the most dominant trade of the month, and appearing halving expectations. be overdrawn. With the recent slowdown in ETF inflows, lack of new hot spots in the market and more subdued sentiment, selling in the medium term is indeed the best option, and the short term is worth it due to the presence of the halving,” point out Greeks.live analysts.
BTC and ETH Price Evolution
This week has been very volatile for the leading cryptocurrency, which saw its price drop below $68,000, but has since recovered. The Bitcoin price is located at $70,836, registering a slight drop of 0.15% in the last 24 hours. Ethereum showed a bit more stable dynamics, falling below $3,438. Currently, the price of the second largest cryptocurrency on the market stands at $3,532. Market behavior on the expiration day of large amounts of contracts is uncertain, even more so when relevant news events occur.
However, it is crucial for traders to pay attention to the situation to prevent increased volatility from leading to unwanted stop loss orders or erroneous trading decisions.
The impact of options expiration on the price of the underlying asset is temporary. Generally, the next day the market returns to its normal behavior and significant price deviations are corrected.
Bitcoin Steady NEAR $71K as GBTC Outflows Recover
(BTC) remains stable, trading above $70,900, as Grayscale Bitcoin Trust (GBTC) outflows rise once again. In total, $124.9 million left GBTC, according to chain data. In comparison, $4.6 million flowed into Fidelity’s FBTC and $11.1 million into Bitwise’s BITB. As of Thursday, all Bitcoin ETFs have reported a weekly outflow of $227.9 million.
There is currently a belief within the market that continued GBTC outflows put selling pressure on BTC and drive prices down. Such belief is not universal, however, and some market participants have a wait-and-see approach, highlighting that capital outflows from GBTC are expected, given its higher fee structure.
Traders are pricing in some price stability for Bitcoin in the remaining weeks of April, with bettors on Polymarket putting the chance of BTC hitting $75,000 at 60% by the end of the month and the chance of it hitting $80,000 at 32%.
Bitcoin (BTC) is trading today, April 12, at US$70,940.12, according to the Live Coin Watch portal. This price positions it 100% compared to its value 24 hours ago and 106% compared to the same day last week.
By Audy Castaneda
