Large Options Positions Will Expire While Volatility Looms Over BTC and ETH

At the end of January, the cryptocurrency markets faced a critical point with the expiration of massive derivatives positions. This event revealed the complex dynamics between buyers and sellers, with data showing significant tensions beneath the market surface.

Expiration Pressure on BTC: 91,000 Options Outstanding

According to BlockBeats, approximately 91,000 Bitcoin options were scheduled to expire during that period, representing a notional value of $7.6 billion. The Put Call ratio of 0.48 indicated that bullish positions dominated the market, though with some caution reflected in the maximum pain point located at $90,000. This metric suggested that market makers were maintaining strategic defensive positions, anticipating potential movements in both directions. Adam, an analyst at Greeks.live, highlighted that this expiration marked the first major monthly liquidation after the annual agreement, with these derivatives accounting for 25% of all positions expiring at that time.

ETH Faces Greater Expiration Volume: 435,000 Pending Contracts

The outlook for Ethereum was even more complex, with 435,000 ETH options nearing expiration, totaling a notional value of $1.19 billion. The Put Call ratio of 0.68 showed a slightly higher demand for downside protection compared to Bitcoin, reflecting uncertainty around this asset. The maximum pain point at $3,000 indicated the area where the highest open interest concentration was found, suggesting traders expected volatility in that critical zone.

Implied Volatility Reaches Peaks: The Impact of Bearish Defense

Implied volatility data revealed underlying market tension. The implied volatility of the main term for BTC averaged around 45%, while ETH reached 60%, both at their highest levels of the year so far. This escalation reflected a perception of elevated risk among traders. Historical support levels, such as $80,000 for Bitcoin and $2,500 for Ethereum, continued to serve as critical references following the corrections in the previous fourth quarter.

Block trading volume and transaction ratios showed accelerated activity, mainly driven by portfolio repositioning. Market makers and active traders maintained significant cash positions, demonstrating willingness to transact, with the highest demand concentrated in bearish defensive strategies. This landscape reflected a transitioning market, where uncertainty kept participants on high alert.