Examining Bitcoin and Ethereum Options Expiry: Testing Max Pain Levels

Bitcoin and Ethereum will see billions of dollars’ worth of options expiring on December 20. The dynamics around maximum pain levels and Bitcoin's put skew are set to create potential short-term volatility in the market.

Key Takeaways

A significant amount of Bitcoin and Ethereum options contracts are set to expire on December 20.
Bitcoin options are dominating the expiry volume, with specific max pain price levels identified.
The current market data indicates a heavier focus on put contracts for Bitcoin compared to Ethereum.
Ethereum’s options structure shows a more balanced approach toward puts and calls.
Upcoming options expiries may significantly affect price movements as traders adjust their positions.

Bitcoin and Ethereum options expiry tests key max pain zones.

Overview of Bitcoin and Ethereum Options Expiry

As December 20 approaches, a notable volume of Bitcoin Bitcoin btc0.11% and Ethereum eth1.11% options contracts are due to expire. This expiry holds considerable notional value and has created a crucial focus for traders, as indicated by options market data.

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Bitcoin Options Analysis

Data shows that Bitcoin options make up the majority of the expiring contracts. Analysts have identified a "max pain" price level, which is the point at which the highest number of options contracts would end up worthless.

Currently, the options data highlights a greater number of put contracts in Bitcoin’s structure, as indicated by the put open interest and the put/call ratio weighted towards puts just before the expiry.

Ethereum Options Insights

In contrast, Ethereum options make up a smaller portion of the total expiry volume, indicating that fewer contracts are maturing. Market data has also pinpointed a max pain price for Ethereum.

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The positioning of Ethereum options reveals a more balanced approach regarding puts and calls compared to Bitcoin, suggesting that there is less focus on downside protection for Ethereum as opposed to Bitcoin.

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Implications for the Market

The data underscores specific price levels for both Bitcoin and Ethereum that are critical as Friday’s options expiry approaches. These price levels indicate where the options are most heavily concentrated, which can impact market movements.

Options expiries have a track record of influencing short-term price changes as traders reposition their holdings before the contracts settle.

By understanding these dynamics, market participants can better navigate the upcoming volatility surrounding the expiry of Bitcoin and Ethereum options.