bitcoin and ethereum options worth an initial $2.6 billion in notional value expired today amid a broader market pullback.
According Greeks.live, 25,000 btc options expired, showing a bid/ask ratio of 0.56. The ratio indicates greater interest in call options than put options, suggesting optimism among a segment of investors.
The Max Pain point stood at $67,000 with a face value of $1.7 billion. Similarly, 250,000 eth options expired, with a Put Call Ratio of 0.51 and a Maxpain point of $3,500, equivalent to a notional value of $890 million. The Max Pain point represents the strike price at which most options would expire worthless, and is often considered a pressure point for the market.
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The cryptocurrency market recently underwent a shift, moving away from the potential rally anticipated last week. bitcoin's inability to stay above $70,000 sparked a pullback, defying previous expectations of a sustained rally.
This week, the market saw a surge in demand for puts along with a sharp rise in implied volatility across all major terms. However, contrary to expectations, many short positions closed with profits, reflecting a strategic exit by investors.
The price of bitcoin is now just below $63,000, which is a 6% decline today. The price drop aligns with a record $742 million outflow from bitcoin ETFs during the week, underscoring investor caution and a shift in market sentiment.
As prices align closer to Maxpain points, the once prevalent FOMO (fear of missing out) sentiment has diminished, indicating a more cautious approach by market participants.
