$3.6 Billion Bitcoin, Ethereum Options Set to Expire—What Traders Should Know

Approximately $3.6 billion worth of Bitcoin (BTC) and Ethereum (ETH) crypto options contracts will expire today, following a predominantly bullish week. 

While this is considerably smaller than last week’s expiry, which saw $17.27 billion worth of Bitcoin and Ethereum options contracts expire, today’s expiration could still create short-term volatility in the market.

Crypto Traders Eye $3.6 Billion Bitcoin and Ethereum Options Expiration

According to the data from Deribit, 27,384 Bitcoin options contracts will expire on July 4. This tranche is significantly smaller than last week’s 139,390 contracts. Today’s expiring options carry a notional value of $2.98 billion.

Expiring Bitcoin Options. Source: Deribit

There are 13,373 call contracts and 14,010 put contracts, indicating a slightly higher number of puts than calls, with a put-to-call ratio of 1.05. 

This suggests a slightly bearish sentiment, as more investors are positioning for potential price declines rather than price increases.

Notably, the bearish sentiment is even more pronounced for Ethereum, where 105,397 call contracts and 131,881 put contracts create a put-to-call ratio of 1.25. The notional value of the total 237,278 contracts is $610.516 million. This is again a drop from last week’s 938,551 total contracts.

Expiring Ethereum Options. Source: Deribit

Both the assets are trading above their maximum pain points. As of this writing, Bitcoin was trading at $109,130, above its maximum pain price of $106,000. Similarly, ETH’s press time price of $2,577 was more than its maximum pain level of $2,500.

The maximum pain point is a crucial metric, representing the price level at which the most options contracts expire worthless. This scenario inflicts the maximum financial loss, or “pain,” on traders holding these options. 

The concept is significant because it often influences market behavior. According to the Max Pain theory, the asset’s price tends to gravitate toward this level as options near their expiration.

Thus, while both assets have recorded gains over the past week, these could be challenged. Analysts at Greeks.live noted that the market sentiment is mixed with some short-term bearish behavior regarding trading strategies, but with a long-term bullish structure.

“Traders are implementing put spreads and 100P for EOM positions while maintaining calls in the background, indicating hedged approaches rather than directional conviction. Key technical observation of 90k denied as critical resistance, with maximum downside target seen at 102k (described as “absolute max” before potential breakout higher),” the post read. 

Moreover, the analysts highlighted unusual activity in derivatives markets. Perp CVD (Cumulative Volume Delta) is rising. Yet, the spot market (the actual cryptocurrency market) remains stagnant. Additionally, Open Interest (OI) and funding rates are both increasing. This suggests potential market manipulation or major shifts in positioning.