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$4 Billion Bitcoin (BTC) Options About to Expire: How It Might Affect Price Performance

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Thu, 30/03/2023 - 11:08
$4 Billion Bitcoin (BTC) Options About to Expire: How It Might Affect Price Performance
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In a significant development for the cryptocurrency market, a staggering 141,000 Bitcoin (BTC) options are set to expire soon, carrying a Put Call Ratio of 0.74, a max pain point of $24,000 and a notional value of $4.1 billion.

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Additionally, 1.746 million Ethereum (ETH) options are also nearing expiration, with a Put Call Ratio of 0.33, a max pain point of $1,600 and a notional value of $3.1 billion. These massive expirations could have a considerable impact on the cryptocurrency market, causing price fluctuations and potentially affecting investor sentiment.

The Put Call Ratio is a widely used metric in options trading that gauges the balance between put options, which are essentially bearish bets and call options, representing bullish bets. In the case of the impending Bitcoin options expiry, the Put Call Ratio of 0.74 suggests a slightly bullish outlook among market participants.

The max pain point, on the other hand, represents the strike price at which the combined value of outstanding call and put options is minimized. For Bitcoin, the max pain point is $24,000, while for Ethereum, it is $1,600. Reaching these levels could trigger significant market movements, as investors may look to minimize their losses by adjusting their positions.

At the time of writing, Bitcoin is trading at $28,613, having gained around 7% in value over the last 48 hours. It has not yet reached the local high of $29,346. Ethereum's price performance remains closely tied to the impending options expiration as well. The massive expiry of options contracts on both Bitcoin and Ethereum may lead to increased volatility and market fluctuations in the short term.

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