The upcoming $1.9 billion Bitcoin options expiry on August 25 will determine if the $26,000 support level holds, while regulatory challenges and a potential loss of $380 million add to the bearish sentiment in the cryptocurrency market.
Deribit, the leading crypto options exchange, will settle $1.9 billion worth of Bitcoin options contracts and $893 million worth of Ether options contracts that are set to expire today.
Bitcoin and Ethereum options are set to expire today, with a smaller number of contracts compared to previous weeks, potentially impacting the lackluster prices of both cryptocurrencies, as Bitcoin remains range-bound around the $26,000 level.
Zero-day to expiry options, or "0DTEs," have become popular among retail and institutional traders, with activity in the market hitting record highs, accounting for a significant portion of average daily trading volume in options tied to the S&P 500; however, there are concerns about the potential risks and impact on stock-market stability that these options pose.
Stock traders are bracing for potential turbulence as $4 trillion of options contracts tied to stocks and index options are set to mature this week, coinciding with the rebalancing of benchmark indexes, though some investors remain optimistic about a potential fourth-quarter rally.
Conditions are ripe for difficult trading this week, with the week following September option expiration typically being the worst week of the year for the S&P 500 and the upcoming Fed interest rate decision and Jerome Powell's press conference adding to the uncertainty.
Crypto strategist Credible Crypto suggests that Bitcoin could dip to around $24,900 but still remain on track for a bull market cycle, and he is closely monitoring Bitcoin options open interest as an indicator for the market bottom.
117,000 BTC options contracts and 1.1 million ETH options contracts are set to expire on Deribit, with max pain levels at $26,500 and $1,650 respectively, as traders expect stable prices leading up to the event.
Unusual trading activity in the S&P 500 outside regular market hours is influencing the fate of trillions of dollars' worth of stock options tied to the benchmark US gauge, leading to significant profits for bullish investors and raising concerns about manipulation or hedging strategies.
A $16 billion JP Morgan fund's options reset is drawing traders' attention as it could contribute to additional volatility in the US stock market, which has experienced a 5.2% decline in September, the worst month for the index in a year.
A massive amount of Bitcoin and Ethereum options contracts are expiring today, with the respective notional values of $3.2 billion and $1.8 billion, potentially impacting the market.
The rise of zero-day options contracts in the stock market poses a potential risk as they gain scale, with the potential for increased volatility and market swings, according to JPMorgan.
