- Most bets predicted a bullish close for BTC and ETH.
- ETH could fall below the maximum pain point, while BTC could end the week above.
More than 96,000 Bitcoin options contracts [BTC] and 978,000 for Ethereum [ETH] end on Friday April 26.
According to derivatives exchange Deribit, BTC contracts were valued at $6.2 billion, while ETH contracts were worth $3.1 billion, bringing the total to a staggering $9.3 billion.
Options allow traders to purchase contracts that allow them to buy or sell a cryptocurrency at a predetermined price. As options are about to expire, traders must decide whether to buy, sell or close the contract.
Source: Deribit
Despite the decline, optimism is increasing
Details AMBCrypto obtained from Deribit showed that BTC’s put-call ratio was negative. This indicates that most bets were call options and traders were optimistic about the coin price.
It was a similar case for ETH. For those unfamiliar, buying a call option means a trader will make money if the price rises. On the other hand, a put option is a bearish bet, meaning a trader will make a profit if the price falls.
Source: Deribit
Depending on where the BTC and ETH prices close, the exchange trades noted that sellers stand to gain the most if BTC reaches $61,000. In the case of ETH, buyers could lose a lot of money if the value of the altcoin reaches $3,100.
“Bitcoin options and the removal of a pain price of up to $61,000, along with the expiring open interest of almost $3 billion in Ethereum options and the removal of a pain price of up to $3.1k.”
At the time of writing, the price of BTC was $64,140, marking a decline of 8.52% in the past 30 days. ETH, on the other hand, changed hands at $3,129 – down 12.46% in 30 days.
Different patterns for the top two
To determine where the price might close this week, AMBCrypto looked at the liquidation heatmap. The liquidation heatmap shows traders with high liquidity areas (magnetic zone).
This helps identify potential major liquidation points and the possibility of prices moving into certain regions. According to data obtained from Hyblock, a magnetic zone (colored yellow) appeared on the BTC liquidation heatmap at $67,250.
The downside was that another magnetic area was $62,600. If the price of Bitcoin moves towards $67,250, most options contracts will eventually make money on their bets.
Source: Hyblock
On the other hand, a decline towards $62,600 could trigger losses. However, the pain can be minimal as long as the price isn’t $61,000.
However, it may not be the same case for traders who chose the ETH call option.
Source: Hyblock
Realistic or not, here is the market cap of ETH in BTC terms
At the time of writing, the high liquidity area was around $3,025, indicating that the price could fall below the upper pain mark of $3,100.
If this happens, much of the $3.1 billion expiring could be wiped out. However, if ETH holds above $3,100, puts may not be the only ones to benefit from the price action.