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Bitcoin and altcoins, which have been unable to recover since the crash in October, continue to fall.
Bitcoin fell to the $60,000 level, while Ethereum and altcoins also experienced significant declines.
As the downward trend in the market continues, the expiration date for option contracts in the crypto market has arrived, as it does every Friday.
According to weekly data, approximately $2.6 billion worth of crypto options will expire on the Deribit derivatives exchange on February 6th.
According to Deribit data, $2.15 billion worth of Bitcoin ($BTC) and $408 million worth of Ethereum ($ETH) options will expire.
Accordingly, the Put/Call ratio for $BTC options is 1.42, while the maximum loss point is $82,000 and the intrinsic value is $2.15 billion.
Looking at Ethereum, $ETH options have a Put/Call ratio of 1.13, a maximum stop-loss point of $2,550, and a nominal value of $408 million.
What Do Bitcoin and Ethereum Options Mean?
The put/call ratio is 1.42 for Bitcoin and 1.13 for Ethereum, indicating that investors are selling more than they are buying and showing an increasing bearish dominance in the market.
Max pain, on the other hand, can often act like a magnet in options markets as the expiration date approaches.
In the options market, maximum pain is the price level at which investors incur the most losses, while options sellers feel most comfortable. In other words, it’s a level that acts like a magnet in the market as contracts expire.
At this point, the maximum pain level for Bitcoin is $82,000, while the maximum pain level for Ethereum is $2,550.
However, while short positions in Bitcoin are concentrated between $80,000 and $90,000, those in $ETH are concentrated around $2,000.
As a result, Bitcoin and Ethereum are currently below their maximum pain levels, at $64,800 and $1,900 respectively. According to analysts, this difference between spot prices and maximum pain levels may lead to limited upward movement in the short term. However, it does not necessarily mean a definite rise or fall.
With billions of dollars worth of options expiring, liquidity conditions could change rapidly for both $BTC and $ETH.
*This is not investment advice.