Over $5.6 billion in options expire today: Bitcoin and Ethereum face critical support tests, and short-term fluctuations may intensify.

Over $5.6 billion in Bitcoin (BTC) and Ethereum (ETH) options contracts are set to expire today, a significant event that is causing tension and high fluctuation in the crypto market. Among them, the value of Bitcoin options contracts is as high as $4.7 billion, with the maximum pain price located at $118,000. Although Ethereum's put-to-call ratio shows a stronger bullish tendency, the expiration of options for both major assets may prompt prices to converge towards their maximum pain levels, testing traders' resolve at key support levels.

Massive Options Settlement: Long vs Short Showdown and Market Pricing Power Struggle

Deribit data shows that today's expiring options size far exceeds last week's 4.3 billion USD, causing both retail and institutional traders to be on edge.

· Bitcoin: $4.7 billion game: The value of Bitcoin options contracts has reached $4.7 billion, with a total open interest (OI) of 38,870 contracts. Deribit analysts point out that Bitcoin traders' positions are concentrated between the $110,000 put options and the $120,000 call options, highlighting the fierce standoff between bulls and bears. The put/call ratio is 1.10, slightly leaning towards bearish protection, indicating that traders are more inclined to hedge against downside risk.

· Ethereum: Nearly $950 million in contracts expiring: Ethereum has $944.5 million in options contracts expiring, with an OI close to 217,000. Unlike Bitcoin, Ethereum's put/call ratio is at 0.90, indicating a more optimistic market sentiment, with greater expectations for upside potential.

· Max Pain: The maximum pain price of the two major assets (i.e., the price that maximizes profits for options sellers and results in the largest losses for buyers) becomes a key support. The max pain for Bitcoin is at $118,000, and for Ethereum it is at $4,400.

Risk Intensifies: Leverage Liquidation and Key Support Test

Glassnode's on-chain data and analysis indicate that although the market is still in bullish momentum, risks are accumulating, and the expiration of options may accelerate the clearing process of leverage.

(Source: Glassnode)

· The momentum remains, but risks are approaching: Glassnode indicates that Bitcoin's price is still well above the Short-Term Holder Cost Basis, marking a sustained bullish momentum. However, the rise is nearing the “heated zone,” and short-term risks are accumulating, with a possibility of a sudden correction.

· Open interest and volatility: A surge in open interest typically occurs before a volatility explosion, especially during major expiration events, which can trigger rapid price movements and short-term turmoil. During this period, lower liquidity may amplify price fluctuations and mislead signals in the spot and derivatives markets.

· Testing leverage positions: Glassnode data indicates that the recent slight pullback in the market is testing leverage positions. The two major pain points are $118,000 (Bitcoin) and $4,400 (Ethereum), which happen to be the key support levels that need to be closely monitored.

Market Outlook: Directional Choice After Expiration

Options expiration typically marks a peak in short-term fluctuation, and the subsequent market trend will depend on the buyers' reaction at key support levels.

· Short-term Fluctuation: Due to the expiration of options, the demand for traders to adjust their positions will increase, and the prices of Bitcoin and Ethereum are likely to be pulled towards their respective maximum pain points. Investors should be prepared for severe price fluctuations in the short term.

· Market reset after expiration: After the options contract expires, the market's Fluctuation usually eases, and traders will reallocate based on the new market environment.

· Determining factors: If buyers can absorb the selling pressure at expiration, market confidence will recover, especially in the case of lower liquidity during the weekend, which is conducive to pushing prices further up. However, if prices fall below key support levels and open interest declines accordingly, it may indicate that short-term fluctuations will further intensify, increasing downside risks.

Conclusion

Today's $5.6 billion options expiry is an important “stress test” for the crypto market. Under the dual test of maximum pain points and key support levels, the market will undergo a leverage cleanup and position reset. The performance of buyers at $118,000 (Bitcoin) and $4,400 (Ethereum) will determine the final direction of the market this weekend and later in the month.

Disclaimer: This article is for informational purposes only and does not constitute any investment advice. The crypto market experiences significant fluctuations, and investors should make decisions cautiously.