Bitcoin and Ether Options Worth $5B Set to Expire on August 30

It’s that time of the month again when the crypto derivatives market sees options expiry. A Greeks.live study shows that Bitcoin and Ethereum options worth a combined $5 billion are set to expire on August 30. This could pose substantial consequences for the assets’ traders, as historical events have pointed to impending market volatility.

Data showed that 60,000 BTC worth $3.66 billion will be expended on Friday. The options have a put-call ratio of 0.59 and a maximum pain point of $61,000, signaling bearish sentiments among traders.

The expiring Bitcoin options were below those of August 23, signaling reduced trading volume. Market sentiments seem cautious, as investors are keen on a reserved approach towards Bitcoin. The asset’s value has been inconsistent in recent weeks, ranging between mid-$50,000 and $62,000.

Ethereum Worth $1.34 Billion Set to Expire

According to public data, Ethereum contracts worth $1.34 billion will expire alongside Bitcoin’s. The options have a put-call ratio of 0.49 and a maximum pain point of $2,800 as traders continue to bet on a further Ethereum dump.

The maximum pain point is the price at which holders of an options contract would experience the maximum financial price. Historically, market makers push the underlying asset’s price close to the maximum pain to reduce the payout to traders.

Options data showed an underlying weakness in the Ethereum price this month as the strike price and the maximum pain point differed by over 10%. Ethereum fell over 24% in August as the asset saw significant outflows post-ETF approval.

Also, short-term implied volatility (IV) on the options market has dropped, with traders expecting reduced volatility. However, IV remains high in the long term as investors look towards a significant price movement in the last quarter of the year.

Bitcoin and Ethereum have historically performed well during Q4 in the past years, and option traders are already gearing up for that. Data showed that large traders have started placing orders at a possible October rally.

Bitcoin traded at $59,621 at press time with a market cap of $1.15 trillion, while Ethereum exchanged hands for $2,522, with a market cap of $294.3 billion.