Up to $15.2 billion worth of Bitcoin and Ethereum options are set to expire on March 29, and their prices may be affected by the Spot ETF and upcoming halving. The digital currency ecosystem, led by Bitcoin and Ethereum, is currently facing uncertainty in terms of liquidity. Despite the positive fundamentals of various altcoin projects, Bitcoin’s influence still causes volatility in the market, making it unstable.
In the next 24 hours, this unpredictable surge in volatility may be compounded as Deribit data shows that around $9.5 billion worth of Bitcoin Options Contracts and $5.7 billion worth of Ethereum contracts are set to be settled on March 29. According to Luuk Strijers from Deribit, there is a possibility of upward price pressure, especially considering that most of the contracts will be settled with a profit.
The $15.2 billion quarterly options expiry is considered one of the largest in Deribit’s history, as it is recognized as one of the largest crypto options firms globally. To understand the options market, a Call Option gives traders the right to buy an underlying asset at a predetermined price on a later date, while a Put Option gives the right to sell an asset at a predetermined price, regardless of its dollar value.
Deribit’s data reveals that $3.9 billion, or 45% of the $5.9 billion worth of Bitcoin options, is on track to expire in profit. For Ethereum, 15% of the $5.7 billion worth of options is on track to expire in the money. With the strike price for Call Options set relatively low, investors may choose to buy more Bitcoin and Ethereum at a lower price, thereby driving the prices higher.
However, this relationship is not expected to be linear. Market expert David Brickell, Head of International Distribution at Canadian crypto firm FRNT Financial, suggests that there may be intense volatility around the $70,000 price mark as Options dealers hedge their bets at this point.
Apart from the options market, other factors are also expected to impact the price outlook of Bitcoin and Ethereum. The spot Bitcoin ETF accumulation trend has played a significant role in pushing Bitcoin to new All-Time Highs (ATH) this month. Bitcoin has experienced some corrections but is currently priced at $70,738.23, up 2.81% in the past 24 hours.
Similarly, Ethereum has benefited from these trends, especially since the launch of its Dencun Upgrade earlier this month. With sustained fundamentals and the upcoming BTC halving event, investor sentiment is expected to shift, potentially leading to a retest of ETH’s ATH of $4,891.70 in the coming weeks.