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Crypto Crunch Time: $730M Worth of Options Expire – What’s Next for Bitcoin and Ethereum?

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  • Bitcoin options contracts worth $400 million are set to expire on October 6.
  • Ethereum options with a notional value of $330 million are also due for expiry on the same day.

The Expiry Implications: An In-depth Look

As the world of cryptocurrency gears up for the expiration of a significant amount of options contracts, eyes are set on the potential market movement. With Bitcoin options worth about $400 million and Ethereum options amounting to approximately $330 million coming to term, the total open interest, collectively, stands at a staggering $730 million.

Bitcoin Options: What’s at Stake?

A notable point of interest lies in the “max pain” threshold for Bitcoin, presently pegged at $27,000. For the uninitiated, the ‘max pain’ level in the options world indicates the price at which the most significant financial loss would occur upon expiration. This price is about $500 shy of Bitcoin’s ongoing spot price.

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The equilibrium between option holders can be understood through the put/call ratio. A ratio nearing 1 suggests an almost even divide between those optimistic (call) and those pessimistic (put) about future prices. For the imminent Bitcoin options expiry, this ratio stands at 0.89, depicting a well-balanced sentiment between the longs and the shorts.

Market analytics firm Greeks Live has noted that despite Bitcoin steering an uptrend this week, the looming volatility remains subdued, attributing some of this calmness to reduced Asian trading volumes due to holidays.

Ethereum Options: A Parallel Scenario

On the Ethereum front, about 200,000 options contracts will meet their end on October 6. Much like its Bitcoin counterpart, the Ethereum options also possess a put/call ratio of 0.87, underscoring a similar sentiment distribution among traders.

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Although these sizable expiries may hint at potential volatility, current observations suggest a limited impact on spot markets. Bitcoin, after a brief surge to $28,500 earlier in the week, has seen a 3.5% reduction, now trading around $27,485. In the absence of external catalysts, it’s poised to settle near the $27,000 support. Simultaneously, Ethereum has experienced a 6.6% dip since its Monday rise, currently trading just above the $1,600 support.

With these impending expirations, the crypto community watches with bated breath, even though the prevailing sentiment is that of stability amidst these events.

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