The cryptocurrency market witnessed a shift in momentum as traders adopted a wait-and-see approach in anticipation of a significant options expiry event. Over $2 billion worth of options contracts for Bitcoin (BTC), Ethereum (ETH), Solana (SOL), XRP (XRP), and Polygon (MATIC) are set to expire on the leading derivatives exchange Deribit, leading to cautiousness.
Market Pullback and Increased Scrutiny
Despite recent bullish factors like the upcoming spot Ethereum ETF launch and the Bitcoin Conference, the looming options expiry cast a shadow of uncertainty. The global crypto market cap dipped slightly from $2.41 trillion to $2.35 trillion, reflecting a cautious pullback. Additionally, liquidation data from Coinglass revealed over $150 million liquidated in the past 24 hours, with Bitcoin and Ethereum being the most affected currencies. This suggests traders are taking profits or adjusting positions before the expiry.
Bitcoin and Ethereum Options in Focus
The spotlight is on Bitcoin and Ethereum options, with a combined notional value exceeding $1.8 billion expiring on Deribit. The breakdown reveals:
- Bitcoin: Over 20,670 BTC options with a value of $1.33 billion are set to expire. The put-call ratio, a metric indicating bearish versus bullish sentiment, sits at a high 1.19. This suggests more put options (bets on price decline) exist, potentially explaining the recent price drop from $65,000 to $63,000. However, rising implied volatility, a gauge of expected price movement, indicates some investor optimism.
- Ethereum: 143,391 ETH options valued at $0.49 billion are nearing expiry. The put-call ratio sits at 0.37, suggesting a slight bearish tilt. The max pain price of $3,150, lower than the current price of $3,444, hints at potential selling pressure. However, the anticipated spot Ethereum ETF launch next week could counter this pressure.
SOL, XRP, and MATIC Expiry Add to the Mix
Linear options for SOL, XRP, and MATIC, settled in USDC (USD Coin), are also expiring on Deribit. Here’s a quick breakdown:
- Solana (SOL): 5,156 options worth $8.5 million are expiring. The put-call ratio of 0.82 and a max pain point of $145 suggest some bearish sentiment, despite SOL’s recent price increase.
- XRP (XRP): 3,473 options with a value of $1.93 million are nearing expiry. The put-call ratio of 0.70 leans slightly bearish, with a max pain point of $0.47. This coincides with a recent price drop for XRP after a prior rally.
- Polygon (MATIC): Options with a notional value of $751,800 are expiring. The put-call ratio of 0.76 and a max pain point of $0.51 hint at a potential price dip below the current level of $0.516.
Looking Ahead: Post-Expiry Market Movements
The crypto market’s reaction to the options expiry remains to be seen. While some anticipate increased volatility, others believe the events might trigger a return to bullish momentum, especially considering positive factors like the upcoming Ethereum ETF. Closely monitoring price movements and investor sentiment in the coming days will be crucial in understanding the post-expiry market landscape.