Analyzing BTC and ETH’s future amid $7.2B traders’ bets

• BTC and ETH long contracts were far more than shorts, but these positions’ expiration could mark the highest in months.
• The Put Call Ratio of both assets remained bullish despite rising concerns.

With the cryptocurrency market buzzing with increased activity, about $7.2 billion in Bitcoin [BTC] and Ethereum [ETH] options contracts may be set to expire. According to Greeks.live, ETH accounted for $2.3 billion out of the value while BTC’s share was $4.9 billion as per the monthly open contracts.

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Calls peg Puts back

Over the last 30 days, Bitcoin’s price has had a cumulative 12.31% increase. The coin’s rise above $30,000 improved traders’ enthusiasm about the price action. Consequently, this has kept the Put Call Ratio (PCR) at 0.56.

Source: Greeks.live

For context, the Put Call Ratio helps traders to understand the sentiment of the options market based on the options open contracts and trading volume. 

Also, a Call option aligns with a coin purchase at an agreed price upon contract expiry. On the other hand, a Put option gives the right to sell an asset in the same circumstance.

So, when the PCR is below a value of 1, it means that there are more Call options than Puts. This means that traders are betting on the market to be bullish. 

Conversely, when the PCR is substantially higher than 1, it implies that more Put options than Calls. Here, the broader market sentiment could be termed bearish. Meanwhile, directional bias is only neutral when the PCR is mildly above 1.

Furthermore, ETH’s PCR was similar to BTC at 0.57. And like the king coin, the altcoin had sustenance above $1,800 to thank for the bullish sentiment.

Source: Greeks.live

Increasing volatility between the fall and rise

As Greeks.live mentioned, BTC’s volatility increased. And based on the Bollinger Bands (BB), the volatility has remained extreme. The BB showed that BTC had exited the overbought area since the price no longer touched the upper band.

However, the Relative Strength Index (RSI) was 67.04. If the RSI hits the overbought 70 levels, then BTC could retrace. If such happens and BTC falls below $30,000, Puts would profit and bears might gain some control.

Source: TradingView

But if BTC maintains a solid buying momentum, and crosses into the $31,000 region, it favors Calls.  

ETH’s Bollinger Bands situation was similar to that of Bitcoin. And like BTC, it was neither overbought nor oversold, despite high volatility. 

But despite a bullish crossover, the Awesome Oscillator (AO) showed that ETH shorts could gain. This was because of the consecutive streak of four red bars. Usually, this is a sell signal. 

Source: TradingView

Read Ethereum’s [ETH] Price Prediction 2023-2024

However, there’s no guarantee that shorts would keep controlling gains for long considering the broader market sentiment.

If bulls fend off bearish appearance, then Calls’ gains would run into millions. On the flip side, if bears extend their dominance, then Puts would quench Calls’ expectations.