With over $3.38 billion in notional value in Bitcoin and Ethereum options contracts scheduled to expire this week, the cryptocurrency market is preparing for possible volatility. For both assets, these expirations may serve as significant turning points as traders consider possible profit-taking and risk rebalancing. Starting with Bitcoin, there are roughly 25,000 options with a notional value of $2.81 billion that are about to expire.
Market sentiment is slightly bearish, as indicated by the Put/Call Ratio at 1.22. More significantly, the price level at which options sellers suffer the least amount of financial loss, the maximum pain point, is set at $104,000. This disparity creates downward pressure because traders may purposefully or unintentionally push Bitcoin toward the pain point, which is currently around $111,000.
However, a short-term pullback is conceivable, particularly in the face of options pressure as the RSI is beginning to creep into overbought territory and volume is tapering slightly. A retest of the $102,000–$104,000 range, which corresponds to the previous breakout zone and maximum pain level, should be anticipated.
Additionally, 202,000 Ethereum contracts with a total value of $570 million are set to expire. The maximum pain level of $2,450 is critical, and the put/call ratio of 1.26 suggests comparable bearish hedging. Above all, with significant moving averages and just emerging from a bullish pennant pattern, ETH is presently trading close to $2,680.
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Similar to Bitcoin, it experienced a sharp increase and is currently in an overbought RSI range of about 74. With traders aiming for $2,450 as a short-term rebalancing point, ETH may experience increased selling or stagnation near current levels in light of these circumstances.
We may be in for some short-term volatility based on the alignment of high Put/Call Ratios and significant gaps between the spot price and maximum pain levels. Even though the overall upward trends are still in place, this Friday’s options expiration may cause a brief cooling off or shakeout prior to the subsequent rally.