17 March 2023 17:01, UTC
Reading time: ~2 m
Option trader’s data platform GreeksLive tweeted on March 17 that the cryptocurrency market is currently experiencing a significant event as 46,000 Bitcoin options and 288,000 Ethereum options are set to expire soon.
46,000 BTC options are about to expire with a Put Call Ratio of 1.11, a max pain point of $23,000 and a notional value of $1.18 billion.
288,000 ETH options are about to expire, with a Put Call Ratio of 1.12, a max pain point of $1,550 and a notional value of $490 million. pic.twitter.com/35dp0EqlsL
— Greeks.live (@GreeksLive) March 17, 2023
These expirations are likely to impact the market price of both cryptocurrencies and may result in increased volatility.
According to GreeksLive, the Put Call Ratio, a key metric used to assess market sentiment, indicates that the market is currently slightly bearish for Bitcoin with a ratio of 1.11 and for Ethereum with a ratio of 1.12. This suggests that investors are more likely to purchase put options, which provide downside protection, rather than call options, which offer potential upside.
The biggest pain point, or the strike price at which the highest number of options are held, for Bitcoin is $23,000 while for Ethereum it is $1,550. This means that if the market price of either cryptocurrency falls below these levels, a significant number of investors holding these options may experience losses.
Moreover, the nominal value of the expiring Bitcoin options is estimated at $1.18 billion, while the nominal value of Ethereum options is estimated at $490 million. This represents a substantial amount of capital that could potentially be impacted by market movements.
Recently, the cryptocurrency market has experienced heightened volatility with Bitcoin weekly positions doubling and the proportion of bearish positions increasing significantly. This suggests that there is increasing uncertainty in the market, and investors are taking positions that protect them from potential downside risks.
Meanwhile, Bitcoin’s price has surged above $26,000 in response to a very bullish macro environment, and if this trend continues, there could be a bullish weekend ahead.
The US Federal Reserve has added an unprecedented $300 billion in assets to its portfolio within a week, reversing quantitative tightening. This, combined with a drop in bond yields and Consumer Price Index, has led to a shift in the expected interest rate and pace of hikes, from tightening to easing.
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