Crypto Market is facing one of today’s biggest stress tests as more than $21 billion in Bitcoin and Ethereum options expire today.
As this is the expiration of the largest quarter end of the third quarter, traders are enduring increased volatility as maximum pain levels converge with macro uncertainty and shift liquidity.
Over $21 billion options expire today: What Traders Should Expect
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Derivatives Exchange Deribit data shows that the conceptual value of $21.09 billion in Bitcoin and Ethereum contracts is set to roll off in conjunction.
“At 08:00 UTC, more than $21 billion crypto options expire with Deribit. Deribit has pawned.
Bitcoin options represent the Lion’s share of today’s expiration date, with a conceptual value of $16 billion. The total open interest is 146,224 contracts, with a put-to-call ratio (PCR) of 0.71.
This refers to the prevalence of call (purchase) options to a Put (sales) contract, suggesting bull market sentiment despite recent pullbacks.
The largest pain level that most option owners experience the most financial losses is $111,000, well above the current $109,526. This suggests that once the expiration date passes, traders may approach this level and try to lock in spot prices.
Meanwhile, Ethereum accounts for the expected value of $5.08 billion, with a massive 1.28 million contracts being issued.
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The put-on ratio of 0.86 suggests a more cautious outlook than Bitcoin despite the prevalence of calls or purchase options.
However, the maximum pain level is $3,800. This is close to offensive at ETH’s current price of $3,963 after a sudden sale this week.
Ethereum recently fell below the psychological $4,000 mark, the lowest drawdown since August 8th. This weakness amplified concerns that if a major support level fails, it could exacerbate pressures that have lost its expiration date today.
Analysts warn of the risk of shortcomings on Ethereum prices
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Options Analytics Firm Greeks.Live highlighted the vulnerable Ethereum state after what was described as a major crash earlier this week.
The company noted that Ethereum prices below $4,000 were the biggest market capitalization metric Altcoin violated multiple technology metrics, warning of significant changes in market sentiment.
“While the implicit volatility of the key terms showed little change, the distorted premium has shifted significantly to put, significantly beyond the call premium, indicating a sharp increase in expectations for downside risk in the options market,” the Greek wrote. Live.
The company also emphasizes that market makers’ positions are currently in the gamma amplification area, a zone in which price fluctuations can be accelerated due to hedge flows.
Some market makers reportedly began purchasing puts for protection, reflecting the growing fear of deeper corrections.
According to analysts at Greeks.live, Ethereum failed to regain more than $4,000, which shows that the options market is facing a re-ric scenario for the bear market.
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By contrast, Bitcoin appears to be trading in a more integrated range, with traders expecting lower volatility than ETH.
It is also worth mentioning that today’s expired option is significantly higher than the $4.3 billion busted last week. The difference is that today’s expired option is for the moon.
Also, a wider macro condition is brought about to add a layer of uncertainty. With central bank signaling rate reductions and liquidity conditions being liquidity conditions, options traders are looking to hedge short-term risks during their more constructive fourth quarter (Q4) positioning.
Despite current caution, Greeks.Live noted that many investors have already begun to make bullish bets in the fourth quarter, and are expecting new momentum at the end of the year.
As an option close to the expiration date at 8:00 UTC on Delibit, traders should expect volatility. However, conditions often become stable as traders adapt to new trading environments.
Nevertheless, given that it is the expiration date for the biggest option in Q3, it may set the tone of the crypto market heading towards the final stretch in 2025.