As the year comes to a close, Bitcoin and Ethereum prices are gearing up for a major event: the biggest options expiry in history, totaling over $11 billion. Despite the significant event, tomorrow’s expiry appears to have little impact on the market.
Bitcoin Is Far From the Max Pain Point (MPP)
You would be pleased as BTC’s rally is expected to favor the positions of Bitcoin’s bulls during the upcoming option expiry. Bitcoin (BTC) continues to exhibit strong support, maintaining a position above $40,000 with the approach of the final quarterly options expiry of 2023.
This Friday at 08:00 UTC, $7.7 billion in BTC options and $3.5 billion in ETH options are set to expire on the Deribit exchange.
Ethereum’s $2,300 Trade Brings Confidence
This quarter has seen an impressive rise in crypto values, with Bitcoin jumping by 62% and Ethereum by 45%. This increase has attracted investors to pursue higher profits through call options, resulting in a high level of open interest with significant in-the-money (ITM) call options.
Ethereum’s options data indicates that bulls have seen substantial gains from their call options, especially as Ethereum’s price recently surpassed $2,300. Ethereum’s Max Pain Point (MPP) is at $1,900, where the largest concentration of call options, worth an estimated $259 million, are currently in the money (ITM). The put-call ratio is at 0.51, indicating a strong preference for call options.
Given that Ethereum’s price is significantly above its MPP of $1,900, it is unlikely to experience bearish volatility, maintaining a bullish sentiment in the market. However, to minimize losses, bears would seek to push Ethereum’s price below $2,200.
Conversely, with the second-highest concentration of call options at $2,500, valued at $238 million, bulls would benefit from pushing Ethereum’s price above $2,500 by 8 am ET on December 29th.
Hot Take
The largest options expiry in cryptocurrency history is looming, with Bitcoin and Ethereum preparing for the event. Despite the anticipation of significant outcomes, the market seems largely unaffected by the approaching expiry, a sign of the resilience of crypto prices.
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