Today, 4.3 billion USD BTC and ETH Options are facing Delivery, and the market may experience a short-term Fluctuation.

With the expectation of options delivery this Friday, crypto market traders should be prepared for potential short-term fluctuations. Today, over 4.3 billion dollars worth of Bitcoin and Ether options will expire on the Deribit platform. Among them, the maximum pain point price for Bitcoin is $114,000, and for Ether, it is $4,500. Although this event may trigger prices to converge towards the "maximum pain" levels, analysts believe the market will stabilize quickly after the options expiration. It is worth noting that next week will see a larger-scale historic options expiration.

Today's Options Expiry: What Traders Should Know

Although Bitcoin (BTC) has performed strongly in the past few days, traders and investors should expect some fluctuation in the early European session due to the anticipated options expiry. However, considering that the market typically adjusts quickly to a new trading environment after an event occurs, its impact may be short-lived.

Deribit platform data shows that over 4.3 billion dollars worth of Bitcoin and Ethereum (ETH) options will expire today. Among them, the nominal value of Bitcoin's expiring options is 3.5 billion dollars, with a total of 30,208 open contracts. Its put/call ratio (PCR) is 1.23, and the maximum pain point level is 114,000 dollars.

In terms of Ethereum, the notional value of the options expiring today is $806.75 million, with a total open interest of 177,398 contracts. Unlike Bitcoin, the put/call ratio (PCR) for Ethereum's expiring options is below 1, with Deribit data showing it at 0.99. Meanwhile, its maximum pain level, or strike price, is $4,500.

The maximum pain point is a key indicator in cryptocurrency options trading. It represents the price level at which most options contracts will become worthless at expiration, a scenario that can cause the greatest financial loss to traders holding these options, referred to as "pain."

It is worth noting that the nominal value of Bitcoin and Ethereum options expiring today is slightly higher than last week. On September 12, BeInCrypto reported that the nominal value of options expiring at that time was close to $4.3 billion, which included 29,651 BTC and 189,700 ETH contracts, with nominal values of $3.42 billion and $858.2 million respectively. However, the main difference between this week's expiring options and last week's is that the PCR value of this Ethereum options is below 1.

Options Market Signals and the Maximum Pain Theory

A PCR value below 1 indicates that the trading volume of call options (buy) is greater than that of put options (sell), suggesting a bullish sentiment towards Ethereum in the market. In contrast, Bitcoin has a bearish sentiment due to the higher volume of put options compared to call options. However, the PCR values of 1.23 for Bitcoin and 0.99 for Ethereum indicate that traders' bets between buy and sell orders are almost in balance. This balanced outlook coincides with investors speculating whether the market will continue to rise or hedge their portfolios against potential sell-offs.

In retrospect, it is worth mentioning that before the Federal Reserve's interest rate decision on Wednesday, the options prices had already been repriced. As a result, the implied volatility of the options contracts has risen, while the trading volume has decreased, indicating that the market remains cautious.

"Before the Federal Reserve interest rate meeting, Options are being repriced, with the implied Fluctuation of the Options expiring tomorrow rising significantly. The recent actual Fluctuation has also been very large, showing a significant increase compared to last month, but the actual trading volume has decreased," noted an analyst from Greeks.live.

Glassnode emphasizes that following the Federal Open Market Committee (FOMC) hike, the market has shown a "post-rate cut patience," with Bitcoin trading above $115,200 and 95% of the supply in profit. "The futures market has seen a short squeeze, with options open interest reaching a historical high of 500,000 BTC before expiration on September 26. Holding above $115,200 is crucial; if it falls below, there is a risk of returning to $105,500," wrote a Glassnode analyst.

This Week and Next Week: Comparison of Key Options Expiry

At the same time, it is worth noting that next Friday (September 26) will see the largest weekly Bitcoin options expiration in history. At that time, options with a notional value of over $18 billion will expire. With the Bitcoin price at $118,000, over $2.4 billion in options are in the "money," with the maximum pain point at $110,000. There are very few open contracts for put options until $110,000.

Therefore, next week could be quite interesting. Although market sentiment is optimistic, margin usually drives short-term price movements, so the market should not be surprised by any potential downturns.

However, at the same time, traders should prepare for Fluctuation as the concept of the maximum pain point often affects market behavior. According to the maximum pain theory, as Options approach expiration, asset prices tend to gravitate towards that level. As the Options near Deribit's expiration time (UTC 8:00), the Bitcoin price (trading at $117,147 at the time of writing) may drop towards its maximum pain point of $114,000. Meanwhile, Ethereum (trading at $4,590) may drop towards $4,500. However, the market usually stabilizes quickly after traders adjust to the new price environment. With a large number of Options expiring today, traders and investors can expect similar results, which may affect the market trend heading into the weekend.

Conclusion

Today's options expiry event is a typical manifestation of the periodic fluctuations in the crypto market. It reminds us once again that while the fundamentals and macro signals provide a long-term direction for the market, in the short term, the complex dynamics of the derivatives market, especially the impact of the maximum pain theory, can trigger predictable price fluctuations. For investors, understanding these periodic events and managing risks effectively is crucial. Looking ahead to next week, the upcoming historic large-scale options delivery suggests that the market may face a greater test of volatility, which will also be a key moment to validate its short-term resilience and long-term upward trend.