Key Points
- Over 96,000 Bitcoin and 978,000 Ethereum options contracts are set to expire on April 26.
- These contracts are valued at a total of $9.3 billion.
The majority of bets are predicting a bullish close for Bitcoin (BTC) and Ethereum (ETH). There’s a possibility that ETH might drop below the max pain point, while BTC might end the week above it.
Options Contracts Expiry
On Friday, 26th April, more than 96,000 Bitcoin [BTC] and 978,000 Ethereum [ETH] options contracts are set to expire. According to derivatives exchange Deribit, the BTC contracts are valued at $6.2 billion and the ETH contracts at $3.1 billion, totalling a staggering $9.3 billion.
Options contracts allow traders to buy or sell a cryptocurrency at a predetermined price. As the expiry date approaches, traders must decide whether to buy, sell, or close the contract.
Bullish Bets on BTC and ETH
Information from Deribit indicates that the BTC put-call ratio was negative, implying that most bets were calls and traders were optimistic about the coin’s price. A similar situation was observed for ETH. Buying a call option means that a trader will profit if the price increases, while a put option is a bearish bet that profits if the price drops.
The exchange noted that sellers might profit the most if BTC hits $61,000. On the other hand, ETH buyers might lose significantly if the altcoin’s value reaches $3,100.
At the time of writing, BTC’s price was $64,140, an 8.52% decrease in the last 30 days. ETH was trading at $3,129, representing a 12.46% 30-day decrease.
Liquidation Heatmap
The liquidation heatmap, which shows traders high areas of liquidity, was used to predict where the price might close this week. According to data from Hyblock, a magnetic zone appeared on the BTC liquidation heatmap at $67,250. Another magnetic area was at $62,600.
If Bitcoin’s price moves toward $67,250, most option contracts will profit. However, a decline toward $62,600 could cause losses. The pain could be minimal as long as the price does not hit $61,000.
For traders who went with the ETH call option, the situation might be different. At the time of writing, the high area of liquidity was around $3,025, indicating that the price might drop below the $3,100 max pain threshold. If this happens, a large part of the $3.1 billion set to expire could be wiped out. However, if ETH stays above $3,100, puts might not be the only ones to profit from the price action.
