The crypto market is bracing for volatility as the expiration date of over $4.3 billion in Bitcoin and Ethereum options draws near. Traders anticipate significant price fluctuations, with many predicting a surge in Bitcoin prices once these options expire. 4 trillion in market capitalization after recent inflation data showed cooling off in the US consumer price index (CPI). This positive sign is further supported by expectations for the Federal Reserve’s possible interest rate cut next week. However, the introduction of new exchange-traded funds (ETFs) from REX-Osprey XRP, BTC, DOGE, TRUMP, and BONK will contribute to market volatility.
While options expiry looms, traders are analyzing the impact on specific cryptocurrency prices, particularly Bitcoin and Ethereum. Bitcoin’s put-call ratio currently stands at 1.31, suggesting heavy bearish bets. The implied volatility is expected to decrease slightly despite the upcoming Federal Reserve decision next week, hinting at a potential pullback in BTC price. The high trading volume of over half of daily trading volume being block trades has been observed on Deribit, indicating market shifts.
On Ethereum’s front, options traders anticipate significant movements following a $0.85 billion worth of Ethereum options with a put-call ratio of 1.02, implying more bearish sentiment. While the max pain point for ETH is projected to be $4,400, this doesn’t fully negate potential gains as traders are focusing on resistance levels around $4,700 before the Fed rate cut next week.
Expert opinions are mixed. Peter Brandt anticipates a downward trend in Bitcoin prices in October. Conversely, veteran trader Michael van de Poppe believes ETH prices will rebound with a pullback in bearish sentiment.
Despite this volatility, overall market sentiment remains optimistic about the fourth quarter of 2023, suggesting potential future growth for both Ethereum and Bitcoin.