$2.2B in Bitcoin and Ethereum Options Expire With Bullish Outlook, but There’s a Catch
$2.2 billion worth of Bitcoin and Ethereum options expired with a moderately bullish outlook. The crypto market has experienced a volatile week, characterized by both optimism and despair. Prices started off strong but quickly declined, erasing all gains from the previous week due to ongoing macroeconomic challenges.
Adding to the events of this eventful week is a significant options expiry. While the data suggests a moderately bullish sentiment, there is a catch.
Over $2.2 billion worth of Bitcoin and Ethereum options expired by 8:00 UTC on Friday, January 10. Specifically, the Bitcoin market saw 19,000 BTC options valued at $1.81 billion expire, with a put-call ratio of 0.65 and a maximum pain point of $97,000.
In the Ethereum market, 141,000 ETH options worth $460 million expired, with a put-call ratio of 0.48 and a maximum pain point of $3,450.
The expiry of options contracts with put-call ratios below 0.7 indicates a bullish sentiment, particularly for Ethereum. This suggests that for every five puts, there are approximately ten calls.
Furthermore, according to the max pain theory, Bitcoin’s price is expected to increase towards $97,000, while Ethereum is expected to gravitate towards $3,450 as market makers adjust their positions to minimize losses.
To provide some context, Bitcoin is currently trading at nearly $95,000, while Ethereum is trading around $3,300.
Despite this seemingly positive data, recent market weakness may give traders pause for thought in the coming weeks, according to options trading kit provider Greeks.live.
This week, Bitcoin saw a drop of nearly 11%, falling from almost $103,000 to as low as $91,000. Similarly, Ethereum experienced a decline of nearly 14%, dropping from around $3,700 to $3,200. This decline in the market came as stronger-than-expected U.S. job numbers reduced expectations of an interest rate cut.
Traders will closely monitor Bitcoin’s price action and ETF flows in the coming week to adjust their positions, given the macroeconomic challenges. Greeks.live noted that while the upcoming inauguration of Donald Trump could provide some tailwinds, long-term benefits are still needed. Trump’s election victory was a significant catalyst for the Q4 2024 rally in the crypto market, as investors anticipate favorable regulatory conditions.
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