- Bitcoin and Ethereum Options Expiry
- Impact of US Fed Interest Rate Cut
- Expected Volatility in the Crypto Market
The top two cryptocurrencies, Bitcoin and Ethereum, have experienced impressive gains of 3.0% and 5.8%, respectively, in the last 24 hours. Evidently, both these cryptos have benefited hugely from the recent interest rate cut of the US Federal Reserve. At this juncture, the massive options expiry scheduled for today is extremely crucial. How will the expiry impact the cryptocurrency market?
Bitcoin and Ethereum Options Expiry
As per the data collected from Derbit, at least 20,037 Bitcoin options contracts, worth as much as $1.26 billion, and nearly 125,046 Ethereum options contracts, worth around $308 million, will expire today. The Bitcoin options contracts will expire with a put-to-call ratio of 0.85. This indicates that the majority of the participants hold a bullish view about the Bitcoin market. Meanwhile, the Ethereum options contracts will expire with a put-to-call ratio of 0.65, implying that the preponderance of the participants has an optimistic view about the potential growth of the Ethereum price.
Impact of US Fed Interest Rate Cut
The recent interest rate cut by the US Federal Reserve has influenced the prices of both BTC and ETH optimistically. A strong bullish momentum emerged in the Bitcoin market on September 17. It took the price to around $61,715 at the close of 18th September, and to $62,932 at the close of yesterday. Today, the BTC price stands at $63,720. Likewise, on September 17 itself, Ethereum also embraced a bullish trend and is now preparing to create a new monthly high. On September 2, the ETH price peaked at $2,538, before slipping to a monthly low of $2,226 on September 6. Yesterday, at the time of close it was at $2,463. Now the price is near the level of $2,500.
Expected Volatility in the Crypto Market
An options expiry usually creates volatility, especially when the corresponding asset’s price stays close to the maximum pain point. Notably, the maximum pain point of today’s Bitcoin options contracts expiry is nearly $58,500. At present, the BTC price stands far above the point, and is less likely to fall below it. At the same time, the maximum pain point of today’s Ethereum options contracts expiry is $2,350. Currently, the ETH price is higher than this point, and there is little chance for the price dropping below it. Therefore, it is important to closely monitor market movements on the day a crucial expiry is scheduled.
In conclusion, an options expiry usually creates significant volatility in the cryptocurrency market. Therefore, it is crucial to closely observe market movements on days when important options expiries are scheduled.
