Bitcoin and Ethereum Face $3 Billion Options Expiry Today, What’s Next?

The crypto market has seen significant gains lately, riding what many call the “Trump rally.” However, with such a massive expiration, the market’s next move is uncertain.

The expiration of large crypto options contracts often sparks price swings. Investors are keeping a watchful eye to see if prices will hold up or dip. The sheer volume of contracts expiring makes this event a critical moment for market sentiment.

According to Deribit, 20,815 Bitcoin options contracts with a combined value of $2.077 billion are set to expire. The put-to-call ratio for these contracts stands at 0.83. This suggests traders are favouring long positions (calls) over short positions (puts), signalling bullish sentiment.

Source: Deribit

Interestingly, the maximum pain point for Bitcoin stands at $98,000. This is just below the current spot price of $101,276, according to Brave New Coin’s Bitcoin Liquid Index. Maximum pain point indicating a tight zone where price shifts could impact the largest number of traders.

While Bitcoin takes centre stage, Ethereum is not far behind. About 164,330 Ethereum contracts, worth nearly $644 million, are also set to expire today. The put-to-call ratio here is 0.68, which means, like Bitcoin, more traders are betting on price increases rather than declines.

Source: Deribit

Ethereum’s maximum pain point remains critical for market watchers, though it currently hovers just below the asset’s spot price. ETH has yet to hit a new all-time high this year and is trading slightly below $4,000. In the past 24 hours, ETH has declined 0.55%, according to Brave New Coin’s Ethereum Liquid Index.

“The recent Block call options trading accounted for a higher proportion, the daily average accounted for more than 30%,” said Greeks Live. “In previous years, the Christmas season in Europe and the US trading heat will be significantly reduced. This year, the influence of US stocks on the crypto rises, and this phenomenon may be more obvious.”

Market makers are already adjusting their positions with the Christmas season and year-end deliveries approaching. A surge in bullish options trades suggests traders are optimistic about a positive close to the year.

The prospect of a crypto-friendly Trump administration in 2025 has further fueled bullish sentiment. Traders are anticipating policies that could support the crypto industry, adding a layer of optimism to the current market dynamics.

Ethereum’s performance, though lagging behind Bitcoin’s, has still shown promise. Since November 22, ETH-based ETFs have enjoyed consistent inflows. By December 12, total net flows reached $1.97 billion, according to data from SoSoValue. This steady inflow reflects growing investor confidence in Ethereum’s future prospects.

Source: SoSoValue

Over the past two weeks, many transactions have focused on short-term profit strategies (PVP), making options trading attractive due to its cost-effectiveness. Recent economic data fueled this rally. The latest Consumer Price Index (CPI) report showed rising inflation in the United States, aligning with economists’ forecasts. Additionally, the increased likelihood of a December 18 rate cut of 25 basis points by the Federal Reserve has bolstered investor confidence.