Will $3.9 Billion in Crypto Options Expiring Today Shake Market Momentum?

Cryptocurrency market on edge as $3.9 billion in options, including 34,000 BTC and 215,000 ETH contracts, expire today. Current support levels for Bitcoin and Ethereum under scrutiny as geopolitical tensions weigh. Analysts expect volatility, but market stability could preserve price levels.

The cryptocurrency market is bracing itself for a pivotal day, with around $3.9 billion in options contracts set to expire. This staggering figure includes about 34,000 Bitcoin (BTC) options worth roughly $3.3 billion and 215,000 Ethereum (ETH) contracts valued at about $546 million, based on data shared by Deribit.

This week’s expiry follows a period of underwhelming performance in the spot markets. Since June 17, crypto assets have collectively lost about $30 billion in value, pressured by geopolitical tensions in the Middle East which have contributed to a general risk-averse sentiment among investors.

Bitcoin’s options set to expire today exhibit a put/call ratio hinting towards bearish sentiment. Notably, the ‘max pain’ point—where option holders experience maximum financial loss—stands at $106,000, which is right in line with Bitcoin’s trading price at the time of this report. This figure highlights the potential short-term downside pressure on the leading cryptocurrency.

According to Deribit, the highest open interest for Bitcoin options is concentrated in the $115,000 to $140,000 strike price bracket. These areas are reported to have upwards of $1.7 billion in contracts each, suggesting that some traders remain bullish despite the current market environment. However, there’s an overarching sentiment of caution as traders are anxious about crucial support zones at $104,000 and $100,000.

Turning to Ethereum, its 215,000 expiring contracts, valued collectively at $546 million, also show a more optimistic outlook with a put/call ratio of 0.68. The max pain point for ETH is noted at $2,600, slightly above where it’s currently trading.

Despite some fluctuations, Ethereum has managed to stay above the $2,500 mark this week, but not much change has been seen in the last couple of days. With options contracts approaching expiration, technical support levels may start to face increased scrutiny.

As of now, the total cryptocurrency market capitalisation is listed at $3.24 trillion, indicating a 1% drop over the past day. The market appears to be stuck, moving within a channel created earlier in May, amidst ongoing geopolitical and macroeconomic challenges.

Bitcoin has experienced a 3.8% drop from its recent high of $108,770, seen earlier this week. Ethereum’s price has remained largely stable, yet many altcoins are reflecting continued weakness. An exception is Bitcoin Cash (BCH), which has surged 7.7% over the previous 24 hours, while Hyperliquid (HYPL) dropped by 4.8%.

In the past, significant options expiries have often led to short-term volatility, especially with the current contract values being so high. However, analysts believe that unless major price levels are breached, the immediate disturbances might be limited. If Bitcoin were to dip below $100,000 or Ethereum fell beneath $2,500, that could trigger increased selling pressure. Alternatively, if key support levels hold, the expiry may have a minimal effect on the overall market.