How well did Ethereum do in the face of expiring contracts?
Ethereum’s spot has remained unfazed by the expiry of nearly 460,000 ETH Options contracts on Friday. The contracts that made up for almost $450 million in Open Interest, on expiration, dropped to $342 million, as highlighted by the data provider Skew.
Although the drop in Open Interest was normal after such a huge expiry of contracts, Deribit, the largest venue offering ETH Options contracts, saw a significantly big drop.
However, even after the aforementioned expiries, the Options market continued to show bearishness. In fact, this was highlighted by the Put/Call ratio as it jumped from 0.88 to 0.92 on the charts.
This meant that there could be a sell-off underway as traders opted for more Puts than Calls. Although, the bearishness had not yet translated in the spot market, could it be possible that it will be only visible by Monday?
A week back on 18 September, when a limited number of ETH Options contracts had expired, the spot market remained steady at $385. However, over the weekend, the ETH market was hit by volatility and on Monday, we saw the price crumble to $331. This could be a result of the expiry of Dow Futures, a development that also impacted the Bitcoin market and the extended altcoin market.
In fact, the Bitcoin market had also seen a minor set of contracts expiring last Friday, with the price not noting any negative impact whatsoever. However, on the 19th, there was a strong bullish pump and BTC’s price surpassed $11k. Alas, come Monday, and the loss was realized in the market, along with the huge expiry in the stock market. Bitcoin has faced an expiry of nearly $1 billion, but the cryptocurrency’s price was still holding strong.
It would be interesting to witness whether the bearish currents are carried forward in the market, only to realize a loss over the weekend. As the Ethereum market also has been seeing the traders anticipate a sell-off, the price may be challenged with volatility in the coming days.