Today, approximately $5.79 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are due to expire.
Market watchers are particularly attentive to this event due to its potential to influence short-term trends through the volume of contracts and their notional value. Examining the put-to-call ratios and maximum pain points can provide insights into traders’ expectations and possible market directions.
Insights on Today’s Expiring Bitcoin and Ethereum Options
The notional value of today’s expiring BTC options is $4.68 billion. According to Deribit’s data, these 58,633 expiring Bitcoin options have a put-to-call ratio 0.71. This ratio suggests a prevalence of purchase options (calls) over sales options (puts).
The data also reveals that the maximum pain point for these expiring options is $96,000. The maximum pain point is the price at which the asset will cause the greatest number of holders’ financial losses.
Expiring Bitcoin Options. Source: Deribit
In addition to Bitcoin options, 527,277 Ethereum options contracts are set to expire today. These expiring options have a notional value of $1.109 billion, a put-to-call ratio of 0.52, and a maximum pain point of $3,000.
The number of today’s expiring options is significantly higher than last week. BeInCrypto reported that last week’s options expiry amounted to $2.04 billion, comprising 16,561 BTC and 153,608 ETH contracts.
This notable difference comes as this week’s expiring options are for the month. Notably, many institutional traders and funds trade options monthly rather than weekly. Additionally, large funds and market makers often roll over or close their positions at the end of the month to adjust portfolios.
Expiring Ethereum Options. Source: Deribit
Market makers and traders also focus on monthly expiries because they provide better liquidity and tighter spreads as they accumulate more open interest over time than weekly expiries.
Ahead of the expiration, options trading tool provider Greeks.live shared its insights into the options market. It observed the overall market sentiment is predominantly bearish, with significant concern about further downside potential.
“Overall Market Sentiment: The group is predominantly bearish with traders watching $82,000 as a critical support level that must hold to maintain the HTF (high timeframe) trend. There is significant concern about the continued downside, with many members discussing the rapid 17% decline over three days and debating whether recent selling is controlled or indicative of a broader market shift,” read the post.
Implication of Today’s Options Expiry on BTC and ETH Prices
Against this backdrop, some traders are reportedly repositioning to call ratio spreads as a more defensive strategy. This move is based on the belief that after this drawdown, Bitcoin price action may become choppy, with the potential for a retest of $88,000 before determining further direction.
Deribit says traders are bracing for more volatility, hedging against declining crypto prices to levels last seen just after election day. The dampened outlook comes following US President Donald Trump’s tariffs against Mexico, Canada, China, and Europe.
As BeInCrypto reported, Trump’s surprise announcement of EU tariffs devastated Bitcoin and the broader crypto market. It remains to be seen how Trump’s tariffs could affect crypto and Bitcoin’s potential in the longer term.
For now, however, the max pain prices for both Bitcoin and Ethereum are well above their respective market values. As of this writing, Bitcoin traded for $79,890, whereas ETH exchanged hands for $2,137.
As the max pain price is well above the spot price, this could incentivize options sellers to push Bitcoin and Ethereum prices higher closer to the pain level.
“With the end of the month approaching, BTC options traders should take note: Max Pain for Feb 28 sits at $98,000, with a massive $5 billion notional value. This means the highest open interest is clustered here, incentivizing market makers to keep BTC close to this price. Expect increased volatility and potential price gravitation toward this level,” altcoin options exchange PowerTrade stated.
