3 billion $ Bitcoin and Ethereum options expire today

A massive expiration shakes the crypto markets this Friday. Nearly 3 billion dollars worth of Bitcoin and Ethereum options mature on Deribit at 8:00 UTC. Traders remain cautious after last week’s liquidation shock.

An expiration closely watched by the markets

The expiration of crypto options always represents a pivotal moment. This Friday, 3 billion dollars worth of options mature at 8:00 UTC on Deribit, the world’s leading crypto derivatives platform recently acquired by Coinbase. 

For bitcoin, the notional open interest exceeds 2.53 billion dollars, with a max pain price around $74,000. Ethereum shows 425 million dollars of open interest, with a max pain point near $2,100.

These “max pain” levels indicate the prices at which the maximum number of options would expire worthless, causing the greatest losses for holders. A significant portion of open positions would thus benefit from a rebound toward these thresholds. Yet, sentiment remains cautious.

At the time of writing, bitcoin trades around $66,000, far from its pain point. Ether hovers near $1,950, also pulled back. 

This setup creates palpable tension in the markets. Will traders try to push prices toward these strategic levels before the expiration? Or will caution prevail?

Risk indicators reveal a less visible but equally important reality. Bitcoin’s risk reversal mechanisms remain heavily skewed toward put options. 

According to Laevitas analysts, the one-week and one-month ratios show values of -13 and -11 volumes. These figures translate sustained demand for downside protection options. Investors pay a premium to hedge, reflecting ongoing concern.

The specter of the Bitcoin crash still looms

This nervousness is not without foundation. Last week, bitcoin briefly plunged below $60,000, triggering a cascade of massive liquidations. 

Deribit described this event as one of the “most extreme put option demand moves observed in years.” Bitcoin’s daily RSI hit 15.9, its sixth lowest oversold level since 2015.

These traumas leave lasting psychological traces. Even after price stabilization, traders maintain a defensive posture. 

Data from Greeks.live confirm this trend: over one billion dollars in Bitcoin put options were traded Wednesday, representing 37% of total volume. Most of these positions are out of the money, with strike prices between $60,000 and $65,000.

This concentration of put options suggests institutional investors anticipate a medium-term downtrend. Some analysts even mention a high probability of correction in the next one to two months.

The macroeconomic context does not help. Fears around artificial intelligence caused a collapse in the tech sector. The Nasdaq fell 2% Wednesday, dragging bitcoin down with it. 

The iShares Expanded Tech-Software ETF (IGV) plunged 3%, down 21% since the beginning of the year. This growing correlation between crypto and tech exposes bitcoin to powerful headwinds.

The crypto market is going through a critical phase. The expiration of 3 billion dollars of options will test investors’ resilience. Between institutional caution and a timid return of optimism, the coming hours promise to be decisive for Bitcoin and Ethereum.