Bitcoin and Ethereum Face Volatility as $15B Options Expiry nears

• As much as $15.2 billion in Bitcoin and Ethereum options is set to expire on March 29.
• The price of the assets will be impacted by the influence of Spot ETF and halving bound to play a role.

The digital currency ecosystem, led by the duo of Bitcoin (BTC) and Ethereum (ETH) is facing liquidity uncertainty at the moment. Despite the positive fundamentals of many altcoin projects, Bitcoin’s influence is still triggering volatility that makes the market unstable.

This unpredictable volatility surge might be compounded within the next 24 hours as Deribit data shows that about $9.5 billion worth of Bitcoin Options Contracts and $5.7 billion for Ethereum are on track for settlement on March 29. As noted by Deribit’s Luuk Strijers, an upward price pressure cannot be ruled out, considering most of the contracts in question will be settled In The Money (ITM).

The Upside for Bitcoin and Ethereum Price

The $15.2 billion quarterly options expiry is considered one of the biggest in the history of Deribit, recognized as one of the largest crypto options outfits in the world. To gain a proper understanding of the Options market, a Call Option gives a trader the right to buy an underlying asset at a preset price at a later date. The Put Option is the reverse and it gives the right to sell an asset at a preset price, irrespective of the dollar value. 

Per the data insight from Deribit, $3.9 billion, or 45% of the $5.9 billion worth of Bitcoin is on track to expire in profit (ITM). For Ethereum, 15% of the $5.7 billion is on track to expire in the money. With the strike price for the Call Options for these two assets set at a relatively lower price, investors may choose to buy more of BTC and ETH at a lower price, sending the price higher.

This relationship is not expected to be completely linear as market expert David Brickell, Head of International Distribution at Canadian crypto outfit FRNT Financial. According to Brickell, there might be intense volatility around the $70,000 price mark as many Options dealers might be hedging their bets at this point.

While the Options market is poised to impact prices on a macro level with a significant influence showcase, other forces are also expected to act on the Bitcoin and Ethereum price outlook.

Spot Bitcoin ETF and Halving Cycle Impact

Bitcoin and Ethereum maintain a high level of correlation, an association that triggers a similar price trend for both assets. The spot Bitcoin ETF accumulation trend has significantly helped tilt the balance in Bitcoin’s favor, sending it to new All-Time Highs (ATH) this month as previously reported by Crypto News Flash.

Bitcoin has recorded corrections to date as its price is up 2.81% in the past 24 hours to $70,738.23. Since dropping from its ATH above $73,000, the price of Bitcoin has been flirting around the $70,000 level.

Notably, these trends have also proven to be a significant catalyst for Ethereum considering the launch of its Dencun Upgrade earlier in the month. Overall, sustained fundamentals including the forthcoming BTC halving event are poised to shift investor sentiment and complement trends like the impact of the Bitcoin and Ethereum options reaction.

Ethereum’s price has jumped to $3,580.65, up 1.55% in the past 24 hours. With the bullish trends, ETH may retest its ATH of $4,891.70 in the coming weeks.

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