A slew of Ethereum and Bitcoin options contracts are set to expire, but will the markets react this time?
Derivatives traders have been favoring Ethereum options over Bitcoin options lately. As a result, the 260,500 ETH option contract is about to expire.
The number of Bitcoin options that expire is only a fraction of the 30,500 contracts. Furthermore, there is often volatility in the market when options and futures contracts expire. The cryptocurrency markets have been rallying lately and it is likely due to a correction.
Bitcoin options are derivative contracts that allow traders to speculate on the price of BTC. They allow speculators to buy or sell bitcoin at a set price, the strike price, on a certain expiration date. In addition, they are more flexible than futures contracts that have fixed expiration dates.
Bitcoin options are neutral
According to Greeks.live, there is a buy/sell ratio of 0.99 on bitcoin options. Moreover, the maximum price of Pain is $29,000, and it has a notional value of $0.93 billion.
The buy/sell ratio is calculated by dividing the number of sale (short) contracts traded by the number of buy (long) contracts. A value below 1 is bullish as more traders are long than short. The current ratio is evenly matched between bulls and bears.
The maximum pain price refers to the strike price with most open contracts. Furthermore, it is the price at which the asset causes financial losses to the largest number of contract holders at expiration.
The buy/sell ratio for Ethereum options is 0.83, and the maximum pain price is $1,850 with a face value of $5.5 billion. This indicates a slightly more bullish outlook for Ethereum derivatives traders.
Ethereum price is up today after the successful Shapella upgrade on April 12th. ETH is up 10.3% on the day, snapping off an eleven-month high of $2,114 at the time of writing.
Crypto Market Outlook
The cryptocurrency market capitalization has reached its highest level since May 2022. As a result, the figure has reached $1.33 trillion, according to CoinGecko.
BTC was not in the driver’s seat this time around, managing to only gain 2% on the day. The asset was trading at $30,773 at the time of writing.
Neutral option ratios indicate that there will be little impact on the markets when they expire. However, the market’s eleven-month high may be due for a correction soon.
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