Today, a large number of Bitcoin (BTC) and Ethereum (ETH) options worth a total of about $1.6 billion are set to expire.
We figure out how expiration will affect the price dynamics of the two largest cryptocurrencies by capitalization after the key rate was reduced by 50 basis points.
Fed’s Decision Spurring Crypto Market Growth
According to Deribit, $1.26 billion worth of Bitcoin options are set to expire soon. The maximum pain point of these contracts is $58,500, and the put to call ratio of BTC options is 0.85.
There are also 125,046 Ethereum contracts expiring today. The notional value of these contracts is estimated at $308.16 million. The maximum pain point is $2,350; the put/call ratio is 0.65.
In options trading, the maximum pain point refers to the price level at which holders of an asset suffer the greatest losses. The put/call ratio, which compares the number of puts (bets on the downside) to calls (bets on the upside), reflects overall market sentiment.
Analysts from Greeks.live analyzedhow the latest decision by the US Federal Reserve System (Fed) affected today’s options expiration. According to them, the regulator’s move was in line with macroeconomic forecasts.
Experts stressed that there will be two more Fed meetings before the end of this year – on November 8 and December 19. The market currently expects the regulator to lower the key rate by 100 basis points.
The interest rate cut this week had a positive impact on the crypto market. Bitcoin rose from $59,000 to $63,500, and Ethereum rose from $2,293 to $2,482.
According to data CoinGeckoat the time of writing, BTC is trading at $63,713, while ETH is at $2,545.
Typically, the expiration of option contracts causes sharp but short-lived price movements. The market usually stabilizes shortly afterward.
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Source: Cryptocurrency
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