Bitcoin and Ethereum Hold Critical Levels as $2.72B Contracts Near Renewal

Bitcoin and Ethereum Options contracts worth $2.7 billion expire on Friday. A high volume of options expiry often leads to a volatile market, as is evident from the recent price volatility in BTC at the $100,000 mark.

Both Bitcoin and Ethereum continue to show strong support at key levels. While Bitcoin conquered the $100,000 key resistance, Ethereum is currently under the key resistance of $3,900.

Bitcoin Max Pain Point at $98,000, ETH at $3,700

According to Deribit data, 20,815 Bitcoin contracts worth $2.077 billion are scheduled to expire today. With a put-to-call ratio of 0.83, traders still sell more calls (long contracts) than puts (short contracts).

The put-call ratio (PCR) is a metric used by traders to gauge the market sentiment by comparing the number of put options traded to the number of call options traded: 

The maximum pain point price is $98,000, at which most holders will suffer financial losses. BTC’s price is currently over $2,000 from the pain point; however, market volatility could push it toward the pain point.

On the other hand, 164,330 Ethereum options contracts worth $644 million are set to expire today.

Ethereum’s options put-to-call ratio is 0.68. Although it is more balanced than Bitcoin’s, traders sell longer contracts than short ones. Ethereum’s maximum pain point is $3,700, which is currently $200 away from that.

A rising put-call ratio, greater than 0.7 or exceeding 1, means that traders are buying more puts than calls. It suggests that bearish sentiment is building in the market. If the ratio is lower than 0.7 or negative, it is considered a bullish sign.

Market Dominated by Corrections

In general, Bitcoin and the crypto market have been on an uptrend since the start of November following the election results.

After posting multiple highs across multiple cryptocurrencies, the market is in a cool-off phase, with BTC hovering around $100,000, Ether looking to conquer $4,000, and most other altcoins trading near all-time -highs.

The past week saw a strong correction among altcoins, especially the likes of XRP, Solana, AVAX and several others,

The last two weeks of options market data have shown that market makers are more cautious. The sharp fluctuations in the market led to a small rise in the main term IV. Options are very suitable for short-term gaming at this point in time, and the cost-effective way to buy options is still very high.

While Christmas has been a bullish event for the crypto market in a bull run, the current correction phase might end with Christmas week approaching

About the Author

Prashant Jha

Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.

His coverage spans major industry events, including the high-profile collapses of FTX, Three Arrows Capital (3AC), and LUNA, offering readers insightful analyses of their regulatory and market implications. Prashant’s technical background enables him to bridge the gap between intricate blockchain technology and its real-world applications, making his work accessible to novices and experts.

Beyond his professional pursuits, Prashant is an avid music enthusiast, often exploring diverse genres to unwind. A sports lover, he has a particular passion for cricket and frequently engages in discussions about the game. His multifaceted interests and sharp journalistic instincts make him a valuable contributor to CCN, where he continues shaping the crypto landscape's narrative.

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