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Bitcoin and Ethereum’s price drop sparks options expiry and negative rates

3min Read

A turbulent crypto journey unfolds as Bitcoin and Ethereum price decline defies expectations and sparks a frantic movement in the derivative space.

Bitcoin and Ethereum's price drop sparks options expiry and negative rates

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  • The combined notional value of BTC and ETH options set to expire is around $820 million.
  • BTC and ETH witnessed negative funding rates below -0.1 for the first time in over seven months.

According to data from Greeks Live, more than $500 million worth of Bitcoin [BTC] options contracts are nearing their expiration. A similar situation has been observed for Ethereum [ETH], where over $200 million worth of ETH options contracts are also set to expire.

Read Bitcoin’s [BTC] Price Prediction 2023-24

The data revealed that approximately 22,000 BTC options were about to expire, with a Put Call Ratio of 0.55. Also, the maximum pain point was $29,500 and a total notional value of $580 million. 

Furthermore, around 144,000 ETH options are reaching their expiration, with a Put Call Ratio of 0.51. The maximum pain point was $1,800 and a combined notional value of $240 million.

Cryptocurrency options are financial derivatives that grant traders the choice, but not the obligation, to either buy (call option) or sell (put option) at a predetermined price (strike price) within a specific time frame (expiration date).

The put-call ratio is a metric to assess investor sentiment and predict potential market direction shifts. 

Additionally, a high put-call ratio (above 1) indicates more open-put options than open-call options. This suggests a bearish sentiment among investors, indicative of an expected price decline. Conversely, a low put-call ratio (below 1) indicates a higher count of open-call options than open-put options.

This implies bullish sentiment among investors, anticipating a price increase. The state of Bitcoin and Ethereum showed a delicately balanced market, with a move to either side possible.

Bitcoin and Ethereum witness negative funding rates

Amidst the recent price downturn experienced by Bitcoin and Ethereum over the past few days, their funding rates have also experienced a notable decrease. As per a report from Coinglass, Bitcoin OI-weighted funding rate had fallen below -0.01%, a phenomenon not observed since 12 March.

Similarly, examining the Ethereum OI-weighted funding rate revealed a drop below -0.02%. Interestingly, this occurrence represented the second instance since March where Ethereum had encountered such a decline. 

As of this writing, both cryptocurrencies saw positive funding rates, although Ethereum appeared to have made a more substantial recovery.

Analyzing BTC and ETH’s price trends

Illustrating the current unfavorable price trajectory of Bitcoin was its Relative Strength Index (RSI) line, which had entered the oversold zone on the daily timeframe. A closer examination of the chart revealed that over the past four days, BTC had incurred a nearly 10% loss in value.

As of this writing, its value had dipped to $26,000. Also, it was trending below its long Moving Average (blue line) for the first time in more than seven months. 

Bitcoin daily price trend

Source: TradingView

How much are 1,10,100 ETHs worth today?

Furthermore, the price movement of Ethereum mirrored that of BTC. At press time, its RSI had also descended into the oversold zone. This aligned with a downward trend spanning the previous four days.

As of this writing, Ethereum was valued at approximately $1,600, displaying a minor increase. Notably, it had descended below its long Moving Average for the first time in over seven months.

Ethereum daily price trend

Source: TradingView


Adewale is a full-time journalist at AMBCrypto. While he is increasingly fascinating by the world of blockchain and cryptocurrencies, Adewale holds a degree in International Relations. Besides working on insightful articles that touch upon the crypto-space's hottest issues, he finds joy in supporting Manchester United and Afrobeat music.
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