The cryptocurrency market braces for the expiration of 18,400 Bitcoin options contracts, with a total notional value of approximately $1.1 billion. While today’s expiry is relatively modest compared to last week’s and the upcoming $3.5 billion month-end event, the market remains on alert for any potential shifts.

Understanding the Bitcoin Options Expiry

Bitcoin options are financial contracts that give investors the right, but not the obligation, to buy or sell Bitcoin at a predetermined price before a specified date. The expiration of these contracts can sometimes lead to significant volatility in the market as traders adjust their positions.

Today’s Bitcoin options expiry features a put/call ratio of 0.83, indicating a slightly higher number of long (call) contracts compared to short (put) contracts. The max pain point, or the price at which most options expire worthless, is set at $60,000—remarkably close to the current spot price of Bitcoin. This alignment suggests that the impact on the market might be muted unless there are unexpected developments.

Open interest, or the total value of outstanding contracts yet to expire, remains high at strike prices above $70,000. Notably, there is around $967 million in open interest at the $100,000 strike price, showing that some bullish investors are still holding out for a significant rise in Bitcoin’s price.

Market Reactions So Far

In the lead-up to today’s options expiry, the crypto market has been relatively calm. Bitcoin has maintained a position above $60,000, trading at $60,654 at the time of writing. This stability follows a period of gradual decline in total cryptocurrency market capitalization, which now stands at $2.24 trillion.

According to crypto derivatives provider Greeks Live, the market is experiencing a “highly calm cycle,” with a decrease in historical volatility (RV) and a “gradually decreasing expectation of future volatility” in the options market. This calmness is reflected in the relatively stable prices seen in the market, with Ethereum (ETH) up 1.2% on the day, trading at $2,634 during the Friday morning Asian session.

Altcoins are also showing signs of strength, with Binance Coin (BNB), Avalanche (AVAX), and Near Protocol (NEAR) outperforming the broader market.

The Role of External Factors

While today’s options expiry event may not be significant enough to trigger major market movements on its own, external factors could play a crucial role. For instance, today’s Federal Reserve speech at Jackson Hole could introduce unexpected volatility, depending on the tone and content of the remarks.

With the market remaining largely flat and volatility expectations low, any surprises from the Fed’s speech could act as a catalyst for movement. However, if the speech aligns with market expectations, it’s likely that the impact of the Bitcoin options expiry will remain minimal.

Ethereum Options Expiry

In addition to Bitcoin, approximately 140,000 Ethereum options contracts, with a total notional value of $370 million, are also set to expire today. These contracts have a put/call ratio of 0.93 and a max pain point of $2,625, close to the current trading price of Ethereum.

Like Bitcoin, Ethereum has shown resilience, with prices holding steady and even rising slightly in recent trading sessions. The alignment of the max pain point with current prices suggests that Ethereum may also experience limited volatility following today’s expiry.

Conclusion

Today’s $1.1 billion Bitcoin options expiry event is relatively small compared to other recent expiries and the upcoming month-end event. While the market has remained calm, external factors like the Federal Reserve’s speech could introduce volatility. However, unless there are significant surprises, it’s likely that the impact of today’s options expiry will be limited, with Bitcoin and Ethereum continuing to trade within their current ranges.