In the crypto world, every options contract expiration is a date that investors watch closely. This Friday, October 6, approximately 14,000 Bitcoin options contracts, with a notional value of $400 million, will come to an end. Simultaneously, around 200,000 Ethereum options contracts, valued at $330 million, will also expire. These events may raise questions about whether they will significantly influence the crypto markets, which have been experiencing some volatility lately.
It’s important to note that the impact of this expiration appears to be less pronounced compared to last week’s event, which coincided with the end of the month and quarter. Back then, the market was in a state of anticipation, while this time around, implied volatility remains relatively low, with a put/call ratio of 0.89 for Bitcoin options and 0.87 for Ethereum options, according to official data provided by CoinGlass.
Interesting Levels to Watch
A key point to consider is the “max pain” level, which for Bitcoin options is at $27,000, approximately $650 below the current price of Bitcoin. The max pain level represents the point where most losses occur when contracts expire. Therefore, investors may keep an eye on whether Bitcoin will approach this level as we approach the scheduled expiration.
It’s important to emphasize that this expiration event is unlikely to have a significant impact on the spot markets, which have been declining recently. Bitcoin, which briefly reached $28,500 at the beginning of the week, has retreated by 3% to trade at $27,650 at the time of writing this article.
Without additional momentum, it’s expected to return to the support level at $27,000. Meanwhile, Ethereum has lost 6% since its Monday surge, falling to $1,620 during Friday’s trading and is currently recovering around the $1,630 mark as of the time of writing.
Historical trends suggest that October and the fourth quarter have often witnessed upward movements in the crypto market. However, there’s an interesting observation to highlight. The put position share remains high, and with liquidity deteriorating recently, some experts speculate that significant market movements could occur later this month.
While this week’s options expiry event may not be the catalyst for a major market shift, it’s crucial to keep an eye on the broader context and potential factors that could come into play in the crypto landscape.