Will the $3 Billion Crypto Options Expiry Event Trigger a Market Surge?

Today marks the culmination of a significant event in the world of cryptocurrency as numerous Bitcoin and Ethereum options contracts are set to expire. Amidst Bitcoin’s recent surge to an all-time high of over $69,000, speculation abounds on whether this expiry event will further propel prices skyward or usher in a corrective phase.

Approximately 29,000 Bitcoin options contracts, valued at around $2 billion, are slated to expire on March 8. While this week’s expiry is slightly smaller in scale compared to the previous week, anticipation is building for an even larger event at the end of March, with contracts worth more than $6 billion set to expire.

The put/call ratio for today’s Bitcoin options expiry stands at 0.86, indicating a relatively balanced matchup between sellers of long and short contracts. The max pain point, the price at which most losses will occur upon expiry, is identified at $60,000. Notably, there is significant open interest at strike prices of $65,000 and $70,000, totaling $1.9 billion in notional value according to Deribit data.

Market volatility has surged to its highest level in nearly a year, as reported by crypto derivatives tooling provider Greeks Live. All major term implied volatility (IV) is on an upward trajectory, with ultra-short-term IVs reaching as high as 100%. Implied volatility serves as a metric for forecasting the market’s expectations regarding future price movements of an option’s underlying asset.

Furthermore, Ethereum options are also set to expire, totaling around 270,000 contracts with a put/call ratio of 0.55 and a notional value of $1.05 billion. The max pain point for Ethereum is identified at $2,950, with significant open interest observed at strike prices of $3,000 and $4,000, particularly the latter with $826 million in notional value.

In terms of the broader crypto market outlook, the total market capitalization has increased by 2.2% to reach $2.67 trillion. Bitcoin is nearing $67,000, having experienced a daily increase of 1.8%, while Ethereum has seen a more significant uptick of 3.6%, surpassing $3,900 for the first time in over two years.

Interestingly, Binance Coin (BNB) and Shiba Inu (SHIB) have emerged as the top performers of the day, with BNB witnessing a 10% increase to reach $468, and SHIB surging by 11%, edging closer to a top ten position by market cap.