Bitcoin Options Traders Signal Low Volatility, Final Calm Before the Storm?

As a seasoned researcher with over a decade of experience in the cryptocurrency market, I find myself intrigued by the current state of Bitcoin and Ethereum options expiry today. The tension between bulls and bears is palpable, with the BTC price holding steady above $61,000 – a testament to the resilience of this digital asset.


As a crypto investor, I’m keeping a close watch on the upcoming Bitcoin options expiry this Friday. The bullish sentiment seems to be holding strong, with the BTC price hovering above $61,000 at the moment. It’s been quite a tight tussle between the bulls and the bears this week, with the Bitcoin price fluctuating between $59,000 and $61,000 for a significant portion of it.

18,474 Bitcoin Options to Expire Today

As a crypto investor, today sees the expiration of 18,474 BTC options worth approximately $1.12 billion. Interestingly, the put-call ratio stands at 0.83, suggesting that while sentiment is not overwhelmingly bearish, there’s a strong competition between BTC puts and calls. This week, we’ve seen an uptick in block trading with traders preferring to sell call options and buy put options instead. It’s worth noting that the max pain point for Bitcoin options expiry is currently at $60,000, as per the chart below.

Bitcoin Options Traders Signal Low Volatility, Final Calm Before the Storm?

In addition, the data indicates a decrease in weekly option contracts, while the expected volatility remains relatively unchanged before the Jackson Hole meeting, scheduled for this Friday. Essentially, the options market seems to indicate a tranquil period, with a steady volatility curve and a gradually diminishing anticipation of future volatility.

Bitcoin Trading Will Continue to Be Boring

As a researcher studying cryptocurrencies, I’ve observed that during the second quarter of 2024, Bitcoin’s price has been range-bound, fluctuating between approximately $50,000 and $70,000. Noted crypto analyst Will Woo predicts that this relatively uneventful price action will persist until market excess leverage is eliminated.

He added that the BTC crash at the beginning of August led to a significant liquidation of the leveraged position, wiping out most of the open interest from the market. Woo called it a “healthy reset” of the open value, necessary for BTC to climb further.

The analyst added that the BTC price action needs to get really boring before it can make substantial gains. He estimates that the market is about 66% of the way through this process, with much of the speculation now cleared out, though more spot BTC absorption is still needed.

This mid-June assessment is still in play.
BTC price action needs to get really boring.
It seems we’ve almost reached our destination, with approximately two-thirds of the journey completed. Most of the uncertainty surrounding the situation has diminished, but we require further absorption of Bitcoin at location BTC before we can consider ourselves fully there.
— Willy Woo (@woonomic) August 21, 2024

Woo noted that the cryptocurrency market has moved out of the bearish phase and into a more neutral state, no longer classified as a bear market. He explained that Bitcoin is currently going through an extended period of consolidation.

Ether Options Expiry

140,000 Ethereum (ETH) options will expire today, making up half of the total options alongside Bitcoin options. The Put/Call Ratio is 0.93, indicating that there are slightly more call (buy) options than put (sell) options. The maximum potential loss for these Ether options, known as the “max pain point,” is $2,625 per ETH, and their total value is approximately $370 million. At present, Ethereum’s price has risen by 1.4% to $2,672, giving it a market cap of $321 billion, and it appears poised for additional growth towards $3,000.

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2024-08-23 12:02