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Today marks a pivotal moment in the crypto markets as nearly $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) contracts are due to settle or renew. Investors are scrutinizing these developments amid a backdrop of recent gains attributed to what's dubbed the "Trump rally." The question remains—can this momentum persist?
The expiration of crypto options frequently triggers significant price volatility. Traders and investors are thus keeping a close eye on the market dynamics unfolding today.
Data from Deribit reveal that 20,815 Bitcoin contracts, valued at $2.077 billion, are expiring today. The put-to-call ratio stands at 0.83, highlighting a trend where traders sell more long contracts than short ones. The maximum pain point for Bitcoin sits at $98,000, slightly below the current spot market price of $99,758.
Simultaneously, 164,330 Ethereum options contracts, with a value close to $644 million, are also expiring. The put-to-call ratio of 0.68 reflects a similar trend as Bitcoin, with traders favoring long over short positions.
Recently, Greeks Live noted a correction pattern in the market this week. This contrasts with the previous week's minor correction for Bitcoin and a more substantial adjustment for altcoins. As Christmas and annual deliveries approach, market makers are realigning their positions.
"A notable increase in Block call options trading has occurred, surpassing a daily average of 30%," Greeks Live reported. "Despite typically reduced trading activity in Europe and the US during Christmas, this year may see a pronounced influence from US stocks on crypto."
This observation prompts speculation about a potential Christmas rally this month, as the market experiences heightened divergence. Bitcoin hovers just below $100,000, with Ethereum nearing the $4,000 mark.
Option market data from the past two weeks indicate growing caution among market makers. Volatility has characterized the market, causing minor increases in implied volatility (IV). According to analysts at Greeks.live, options currently offer cost-effective prospects for short-term trading opportunities.
"The cost-effectiveness of buying options remains significant," they highlighted.
This expiration event coincides with tumultuous economic data from the US, where inflation rose to 2.7% in November, while core CPI held steady at 0.3%. Although a Fed rate cut is anticipated, persistent inflation poses challenges for ongoing monetary easing strategies.

Massive Crypto Options Expiration Tests Bitcoin, Ethereum Price Stability

Yellow News

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