Deribit exchange data reveals that the put-to-call ratio for Bitcoin options contracts is currently at 0.50, with a maximum pain point of $61,000.
There are two types: call and put options. Call options give investors the right to buy a cryptocurrency at a specific price before a certain date. Put options, on the other hand, allow investors to sell a cryptocurrency at a particular price before the expiry date.
Investors often use the put/call ratio as a metric to assess the general state of the market. If traders are purchasing more puts than calls, it is considered a bearish sign, and if they are purchasing more calls than puts, then the market sentiment is considered bullish.
A put-to-call ratio below 0.7 is considered bullish, while a ratio of more than 1 is regarded as a bearish indicator.
Similarly, a total of 334,248 Ether contracts with a notional value of $1 billion are expected to expire on Friday as well. These expiring contracts have a put-to-call ratio of 0.37 and a maximum pain point of $3,000.
The expiry of options contracts has historically been followed by short-term price volatility in the spot crypto market. Bitcoin and Ether have experienced bearish pressure in the past couple of weeks.
The BTC price fell below $60,000, marking an almost 20% weekly correction post-halving. The Ether price also fell below $2,900. The crypto market often bounces back from the options-led volatility within days of expiry.
Source: cointelegraph.com
