Crypto Market Braces for Volatility as BTC, ETH Options Expiry Collides $7.1 Trillion ‘Triple Witching’

Crypto market traders are bracing for heightened volatility and a potential crash as Bitcoin and Ethereum options expiry coincide with Friday’s ‘Triple Witching’ event. What’s next for BTC price and the broader crypto market?

Over $3 Billion in Bitcoin and Ethereum Options Expires Today

According to crypto derivatives exchange Deribit data, more than 30K BTC options of notional value $2.6 billion to expire today. Open interest volume has dried up as traders adjust positions with a decline in implied volatility and upcoming holidays, with a put-call ratio neutral at 0.75.

Moreover, the max pain price is at $88,000 and the probability of expiring above the $88K strike price is significantly lower, as per the data. Traders expect the BTC price to remain between $85K and $88K until the massive December 26 options expiry.

“BTC open interest is concentrated around 88K, with slightly heavier put positioning, pointing to a relatively contained expiry unless spot breaks range, Deribit highlighted.

Meanwhile, 160K Ethereum options with a notional value of almost $500 million are set to expire today. The put-call ratio is 1.02, indicating bearish sentiment among traders amid sudden price swings.

The max pain point is $3100, above the current market price around $2950. Moreover, traders are targeting a drop in prices to $2,850 in the coming days.

In the last 24 hours, call volume has remained significantly higher than put volume. The put-call ratio is 0.70, indicating positive sentiment among options traders currently.

Deribit claims ETH positioning is more distributed across strike prices, with notable upside interest above $3,400. The current positioning signals traders’ patience into settlement, awaiting a clearer catalyst rather than forcing direction.

Crypto Market Braces for Downside Risks

According to Goldman Sachs data, markets expect sharp moves amid the largest-ever $7.1 trillion ‘triple witching’ event today. Triple Witching is a quarterly event where stock options, index options, and index futures expire simultaneously, often causing high volatility.

In the last three Triple Witching events, Bitcoin and the broader crypto market saw massive pullbacks afterward.
Expiry of crypto options and traditional financial derivatives could increase price swings, as traders scramble to close or roll over positions. All eyes are on how both the crypto market and equity markets absorb the shock.

Matrixport revealed its bearish bias on Bitcoin price as the four-year cycle remains intact. The crypto expert rejected market assumptions that the Bitcoin cycle will unfold differently this time.

As CoinGape reported earlier, 10x Research and on-chain data indicated a further drop in BTC price, especially amid tax-loss harvesting and weak technical structure. The crypto market could also react to today’s BOJ rate hike, which historically has led to a 20-30% crash.

BTC price currently trades at $88,008, with a 1% increase in the last 24 hours. The 24-hour low and high are $85,107 and $89,412, respectively. Trading volume has increased by 31% over the past 24 hours.