In August, Bitcoin (BTC) and then Ethereum (ETH) experienced significant gains, reaching new ATHs. However, as macroeconomic data and increasing uncertainty slowed, upward momentum slowed, and BTC and ETH entered a consolidation phase following their rallies.
While the bullish mood in the market is expected to continue again in September, the expiration date for option contracts in the crypto market has come today, as it does every Friday.
These options are more important because they fall on the last Friday of both the week and the month.
According to data for the fourth week of August, $11.7 billion worth of Bitcoin and $3.2 billion worth of Ethereum options will expire on August 29 on the Deribit derivatives exchange.
Accordingly, the Put/Call Ratio of BTC options is 0.79, the maximum loss point is $116,000 and the notional value is $11.7 billion.
When we look at Ethereum, ETH options have a Put/Call Ratio of 0.76, a maximum loss point of $3,800, and a notional value of $3.2 billion.
Looking at the put/call ratio, we see that it’s 0.79 for Bitcoin and 0.76 for ETH. These ratios indicate a cautious but optimistic outlook in the market, with more buy orders than sell orders and a bullish outlook among options traders.
The maximum pain point is the level at which the cryptocurrency price settles at a certain value as an option approaches its expiration date, resulting in significant losses for the largest number of option traders.
At this point, with $11.7 billion and $3.2 billion worth of BTC and ETH options expiring on August 29th, volatility is expected and both Bitcoin and Ethereum prices are likely to retreat towards their respective maximum pain levels.
As of writing, Bitcoin and Ethereum are trading at $111,000 and $4,450 respectively, with options data pointing to an imminent correction for ETH and a possible upside for BTC.
*This is not investment advice.
