$5 billion BTC and ETH Options expire today; market's low volatility may be tested.

[Coin World] Bitcoin worth nearly $5 billion (BTC) and Ethereum (ETH) options are set to expire today, marking an important milestone that could test market stability amid persistently low volatility. With traders divided on the next course of action and volatility strategies in the spotlight, all eyes are on the key support levels and whether this expiration will shake the market out of its slumber.

Bitcoin and Ethereum options expiry is approaching, with $4.96 billion at risk.

According to the data, Bitcoin leads with options contracts worth $4.09 billion that are about to expire. The maximum pain point is $116,000, representing a level where most options contracts expire worthless, minimizing losses for traders. The total open interest for these soon-to-expire Bitcoin options is 34,954 contracts, with a put/call ratio of 1.46. This PCR indicates a slight bearish tendency, with more put options (selling options) than call options (buying contracts).

For Ethereum, the data is relatively mild but still important. At 8:00 UTC, Ethereum options worth $876 million will expire today, with an open interest of 223,433 contracts. The maximum pain point level is $3,675, consistent with the notional value of $876 million, and the PCR is 1.14, indicating that market sentiment is more neutral compared to Bitcoin.

Analysts emphasized the current distribution of open contracts (OI), pointing out that there are a large number of bearish positions below the spot price, while bullish positions are piling up above. However, this skew may act like a gravitational force, keeping the price within a certain range, but this is only valid before the expiration today at 8:00 UTC.

Low volatility dominates market sentiment

Options analysts point out that the overall market sentiment is mixed, with many traders adapting to a low Volatility environment. Despite concerns over the 32% implied Volatility (IV), traders are still actively selling put Options, especially around the BTC 112,000 strike price, set to expire over the weekend. This indicates that most people are betting on price stability or a moderate increase, which is ideal for harvesting premium.

They also pointed out their confidence in the premium selling strategy, indicating that successful trades will generate profits when the underlying asset has favorable movements. Additionally, the BTC 5-minute EMA100 is a key technical battleground, with analysts emphasizing that it has acted as both resistance and support in recent trades. Since the Bitcoin price is currently below this moving average, it generally indicates a short-term bearish momentum. This may trigger defensive actions from bearish options sellers.

Due to a large number of open contracts around the strike price of $112,000, traders may attempt to push up the price to avoid losses. This move could increase the volatility before and after the expiration of today's $5 billion Options.

Will expiration lead to a surge in volatility? This is an open question. With such a large number of contracts nearing expiration, there is always a risk of sudden repositioning, especially when BTC or ETH breaks through technical thresholds. However, as most traders position themselves as volatility sellers, the consensus still leans towards taking moderate action.

However, once these positions are unwound, the post-expiration environment may present new directional opportunities, especially in the presence of macro catalysts or liquidity shifts. Meanwhile, due to traders defending during a week of volatility compression and harvesting as much as possible, it is important to be aware that the situation may change at any time.