Crypto Options Alert: Bitcoin and Ethereum Set for Significant Expiry Event

A significant event is on the horizon with the impending expiry of 29,000 Bitcoin (BTC) options and 270,000 Ethereum (ETH) options, according to data provided by Greeks.live. This event, set to take place on March 8, encompasses options with a total notional value of over $3 billion. 

The crypto market has been notably volatile, experiencing its highest fluctuations in nearly a year, with Bitcoin hitting a new all-time high above $69,000 before experiencing a sharp 10% decline.

The surge in options trading, driven by the U.S. money-driven spot bull market, shows growing investor interest.

Understanding options expiry 

An options contract offers the buyer the right to purchase (in the case of a call option) or sell (in the case of a put option) the underlying asset at a predetermined price, known as the strike price before the contract expires on a specified date (expiry date).

The put-call ratio is a key indicator used to gauge market sentiment. It is calculated by dividing the number of traded put options by the number of traded call options. 

A ratio below 1, such as 0.86 for BTC and 0.55 for ETH, suggests that more call options (bets that the price will rise) are being traded than put options (bets that the price will fall), indicating a generally bullish sentiment among investors. However, the value below 1 also suggests a level of caution, as the market is not overwhelmingly bullish.

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The concept of "max pain point" refers to the price level at which the largest number of options (both calls and puts) would expire worthless. For investors holding these options, it represents the worst-case scenario where they gain nothing from their investment in the option contracts.

In this context, the max pain points are $60,000 for BTC and $2,950 for ETH. Traders and market analysts often pay attention to these levels as options approach their expiry dates because significant numbers of traders may act to avoid the max pain point. 

Bitcoin price consolidation 

Bitcoin's price trajectory is in the spotlight, with market analysts and top traders like Jake Wujastyk predicting its readiness to establish new record highs. 

After a swift V-shaped recovery from a recent sharp decline, Bitcoin's price has stabilized, showing strong indications of an upcoming bullish run. The cryptocurrency is currently trading around the $67,000 level, with a market cap hitting a new high of $1.33 trillion, reflecting growing investor confidence and adoption. 

The ABC pattern formed during its consolidation phase suggests a solid base for potential price jumps, with forecasts suggesting a reach toward the $76,000 mark.