Bitcoin (BTC) and Ethereum (ETH) options valued at $4.8 billion are due to expire on Deribit, a leading cryptocurrency options exchange, at 08:00 UTC on Friday, causing investors to pay close attention as Bitcoin's price hovers near the $26,000 mark, following a 2.06% decrease in value on Monday.
The upcoming expiration is linked with the concept of the “Maximum Pain Point”, a price level which, if reached, would result in maximum losses for option buyers and maximum gains for option sellers. For BTC and ETH, this point is currently set at $26,500 and $1,580 respectively, figures that are not far off from their levels on Monday of $26,056 and $1,567.
The Maximum Pain Point often influences market prices as option sellers aim to steer the price towards this point to minimize their payouts. If the market price is above the Maximum Pain Point, it can act as support; if below, it can act as resistance. As the last Friday of each month approaches - when options markets typically expire - there's a high likelihood that prices will gravitate towards this level.
Historically, the last quarters have seen significant volume and value in options expiration. In March and June, options worth $5.2 billion and $5.4 billion respectively expired. The current quarter appears to be following a similar pattern as previous quarters in 2023. In September alone, BTC options worth $3 billion and ETH options worth $1.8 billion are due to expire.
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