Up to $15.2 billion worth of Bitcoin and Ethereum options are set to expire on March 29, and the price of these assets could be influenced by factors such as the Spot ETF and the halving cycle. The digital currency ecosystem, led by Bitcoin and Ethereum, is currently facing liquidity uncertainty. Despite the positive fundamentals of many altcoin projects, Bitcoin’s influence on the market still causes volatility and instability.
Within the next 24 hours, there could be a surge in unpredictable volatility as Deribit data shows that around $9.5 billion worth of Bitcoin Options Contracts and $5.7 billion worth of Ethereum options are due for settlement on March 29. Most of these contracts are expected to be settled In The Money (ITM), which could potentially create upward price pressure.
The $15.2 billion quarterly options expiry is considered one of the largest in Deribit’s history, as it is recognized as one of the largest crypto options platforms in the world. To understand the options market, a Call Option allows a trader to buy an underlying asset at a preset price in the future, while a Put Option allows the right to sell an asset at a predetermined price, regardless of its value.
According to Deribit’s data, $3.9 billion or 45% of the $5.9 billion worth of Bitcoin options are on track to expire in profit (ITM). For Ethereum, 15% of the $5.7 billion worth of options are expected to expire in the money. With the strike price of Call Options set relatively low, investors may choose to buy more Bitcoin and Ethereum at a lower price, thus driving up the price.
However, market expert David Brickell warns that this relationship may not be completely linear. He suggests that there could be intense volatility around the $70,000 price mark, as many options dealers hedge their bets at this point.
Apart from the options market, other factors are also expected to impact the price of Bitcoin and Ethereum. The spot Bitcoin ETF accumulation trend has played a significant role in pushing Bitcoin to new all-time highs. Bitcoin has experienced some corrections recently, but its price has remained around $70,000. Similarly, Ethereum has seen a jump in price and may retest its all-time high of $4,891.70 in the coming weeks.
Overall, the options market, spot ETF accumulation, and the upcoming Bitcoin halving event are all factors that could shift investor sentiment and influence the price outlook for Bitcoin and Ethereum.