The cryptocurrency market is bracing for a significant event as approximately $17 billion worth of Bitcoin and Ether options are scheduled to expire this Friday on the Deribit exchange. This expiry marks one of the largest monthly settlements of the year and could introduce notable volatility.

The bulk of the expiring contracts are in Bitcoin, with a total notional value of $14.4 billion. This figure comprises 72,716 call option contracts and 54,945 put option contracts. Ether options contribute another $2.6 billion to the total, with 375,225 ETH in call open interest and 262,850 ETH in put open interest.

Key Price Levels and the “Max Pain” Scenario

A critical metric traders are watching is the “max pain” price—the strike price at which the largest number of options contracts would expire worthless. This scenario causes the maximum financial loss for options buyers and the greatest profit for sellers. For this expiry, Bitcoin’s max pain level is $114,000, closely aligned with its current trading price of around $113,000.

Similarly, Ether’s max pain price stands at $4,110, while the asset currently trades near $4,000. Some market theories suggest that prices can gravitate toward the max pain level leading up to an expiry as market makers adjust their positions to minimize losses.

Traders Positioned for a Volatile Week

Market participants appear to be anticipating sharp price movements, a sentiment reinforced by both macroeconomic events and on-chain data. A meeting by the Federal Reserve to determine U.S. interest rates, along with earnings reports from major tech companies this week, are expected to influence the broader financial markets, including crypto.

An overwhelming 82.5% of the open interest consists of out-of-the-money options, indicating a strong preference for speculative positioning over simple hedging. Call options are heavily concentrated at strike prices of $120,000 and $130,000, while put options are clustered at $100,000 and $110,000. The put-call ratios for Bitcoin (0.76) and Ether (0.70) suggest that bullish call positions currently outnumber bearish put positions.

A Shifting Landscape in the Bitcoin Options Market

The market structure for Bitcoin options has undergone a dramatic transformation. Before November 2024, Deribit dominated the space, controlling nearly 80% of global open interest. However, since the launch of IBIT’s options product, Deribit’s market share has fallen to 44%. IBIT has rapidly captured an equal 44% share, signaling robust competition and providing traders with more venues for executing their strategies.

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