Crypto Market Braces for Volatility as Record $18B Worth of Bitcoin and Ethereum Options Expire Today

A record-breaking $18 billion worth of Bitcoin and Ethereum options contracts are set to expire today, sparking anticipation of sharp market moves and potential volatility.

Of the total expiring options, approximately $14.38 billion are Bitcoin options and $3.7 billion are Ethereum options. The volume of contracts expiring today is striking, with 88,537 Bitcoin contracts and 796,021 Ethereum contracts set to expire.

This surge in activity reflects heightened trader anticipation of either profit or risk mitigation. At the last glance, Bitcoin was trading at $90,330, while Ethereum was trading at $3,340.

Both Bitcoin and Ethereum are trading well above their respective maximum pain prices. For Bitcoin, this price is $85,000, while for Ethereum, it is $3,000.

The “maximum pain price” refers to the point where options buyers face their largest losses upon expiration, frequently causing market shifts as prices tend to move closer to this level.

David Lawant, Head of Research at FalconX, pointed out the increasing hedging sentiment, which could be a key factor driving the rise in Bitcoin’s put/call ratio in the final quarter of 2024.

“Demand for downside protection has been rising,” he noted, suggesting that traders may be looking to safeguard their year-end performance metrics.

Given the current leveraged positions leaning toward the upside, we may witness sudden market fluctuations, particularly if prices stray considerably from what is anticipated.

This unprecedented expiry could influence the market’s storyline for 2025, as traders remain on high alert for upcoming developments.