Bitcoin Options Expiry Event Could Impact Market
With crypto markets showing little movement, all eyes are on the upcoming Bitcoin (BTC) options expiry event scheduled for October 6. Around 14,000 Bitcoin options contracts worth approximately $400 million are set to expire on that day, although this event is smaller than last week’s expiry. The “max pain” point for these contracts is $27,000, which is $700 lower than Bitcoin’s current spot price. This represents the price level where most open contracts exist and where most losses occur when contracts expire.
Put/Call Ratio Indicates Balanced Distribution
The put/call ratio for these options currently stands at 0.89, indicating a relatively balanced distribution between sellers of long and short positions. A put option predicts a decrease in asset price, while a call option predicts an increase. Bitcoin has experienced an upward trend this week, partly due to lower trading volumes during Asian hours caused by holidays. Historically, October and the fourth quarter have seen uptrends in the crypto market. However, there is significant positioning by traders in bearish put options, and liquidity has been decreasing recently, leading to speculation of a potential major market movement in October.
Ether Options Expiry Event
In addition to Bitcoin options, around 200,000 Ether (ETH) options contracts worth $330 million are set to expire on October 6. These Ether options have a similar put/call ratio of 0.87 to that of Bitcoin. The impact of these expiries on spot markets remains uncertain as the event often passes without significant consequences. Currently, Bitcoin has experienced a 3% retracement from its recent spike to $28,500 and is trading around $27,700. Ether has seen a 6.6% decrease since its Monday peak, with a current price of $1,630.
Hot Take: Potential Market Impact of Options Expiry
The upcoming Bitcoin and Ether options expiry events on October 6 could have a significant impact on the crypto market. While the previous week’s expiry was larger, this event still holds considerable value. The max pain point for Bitcoin options is below the current spot price, indicating potential losses for traders. The balanced put/call ratio suggests a relatively equal distribution between bearish and bullish positions. However, the decrease in liquidity and positioning in bearish put options raise concerns about a major market movement, possibly to the downside. Keep an eye on these expiries as they could shape the direction of the market in October.
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