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Bitcoin, Ethereum Options Expiry Triggers $2.63 Billion Shake-Up Amid Market Pullback
The cryptocurrency market is experiencing a significant upheaval following the expiration of major Bitcoin and Ethereum options contracts, resulting in a staggering $2.63 billion worth of expiring derivatives. As a result, both assets are witnessing sharp declines, with traders scrambling to adjust their positions.
The $2.04 billion-worth of expired Bitcoin options contracts had an aggregate max pain point of $101K, while the $590 million-worth of Ethereum options contracts had a max pain point of $3,750. Despite this, neither cryptocurrency has managed to breach these levels, with Bitcoin currently trading at $95,202 and Ethereum at $3,289.44.
The unwinding of positions following the expiry is causing considerable turbulence in the market. This phenomenon is particularly pronounced for Bitcoin, which has fallen 6.41% over the past 24 hours and a staggering 5.10% over the week, reducing its market capitalization to $1.88 trillion.
Ethereum’s plunge is even more precipitous, having lost a whopping 10.50% in the last day alone and a dismal 15.61% in seven days, resulting in a decreased market valuation of $396.41 billion.
Bitcoin’s failed attempt to break the psychological barrier at $110,000, coupled with the ongoing correction, has put significant downward pressure on prices. This decline is further exacerbated by recent ETF outflows and the mass adjustment of positions following the options expiry.
Market makers have been forced to rebalance their portfolios in response to the massive options activity, resulting in a notable increase in block call option trading volumes, which now account for over 30% of daily transactions.
This development has sparked concerns about the market’s ability to recover from these extreme price fluctuations. Some investors believe that the expiration of nearly 40% of crypto options before the year-end will have a calming effect on the market, making options trading more affordable in the short term.
In light of this market turmoil, many analysts are advising caution and urging traders to be mindful of the potentially treacherous waters ahead.
Source: ambcrypto.com
