Nearly $4.6 Billion Bitcoin and Ethereum Options to Expire and Shake the Market

The crypto market needs a life jacket as almost $4.6 billion worth of Bitcoin and Ethereum options would be expiring today.

Deribit data shows that on November 8, 48,794 Bitcoin options contracts worth about $3.57 billion will expire. A maximum pain point of $69,000 is set for these contracts, and the ratio of puts to calls is 0.72.

The same thing is happening with Ethereum's options market, which ends with 294,380 contracts worth $854.88 million. The put-to-call ratio for today's Ethereum contracts that are about to expire is 0.65, with a maximum pain point of $2,000.

What’s interesting about this event is that it comes right after the Federal Open Market Commission's (FOMC) update, where they cut interest rates by 25 basis points (0.25%).

We also shouldn’t forget the US elections, which saw Donald Trump stepping back into the oval office and sending Bitcoin to a new all-time high of $76K.

Why you should pay attention to this expiration—even if you don’t understand jack about options—is how it’ll affect the market and your bags. Depending on how it goes, the market may push higher or prices may tank… and based on calculations, prices might tank a bit.

Options are like betting tickets for crypto prices. You pay a small fee (called a premium) to get the right to buy or sell crypto at a specific price in the future. With a bunch of these betting tickets expiring, it means it's time to see who won and who lost.

Now, you need to understand what’s at stake here. We’re talking a whopping $3.57 billion worth of Bitcoin options—that's a lot of money on the line! The "Max Pain" point for Bitcoin is $68,000. This means that at this price, most people who bought these options would lose money. It's called "Max Pain" because it's the price that causes the most pain (financial loss) for option buyers.

For Ethereum, $0.73 billion worth of options are expiring. The Max Pain point for ETH is $2,500. Same idea here - this is the price where most ETH option buyers would lose money.

Based on the current market prices, we can expect some downward pressure on both Bitcoin and Ethereum as the options expire. 

For Bitcoin, which is trading at $75,940.89, there's likely to be a stronger push towards the Max Pain point of $68,000. This means we might see attempts to drive the price down. Ethereum, trading at $2,914.79, is closer to its Max Pain point of $2,500, so the downward pressure might be less intense.

Many traders who bought call options (bets that the price would go up) are probably happy right now, especially for Bitcoin, as they're in profit. 

On the flip side, those who bought put options (bets that the price would go down) are likely facing losses.

As the expiry approaches, we can anticipate increased market activity and potentially some price swings. Traders will be scrambling to adjust their positions, either to lock in profits or minimize losses. This could lead to higher than usual trading volume and volatility.

After the options expire, there might be a brief period of adjustment as the market digests the outcome. Then, attention will shift to the next round of options, which could influence price movements in the coming weeks.

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