$1.6B in Bitcoin and Ethereum options set to expire after Fed rate cut

The cryptocurrency market is preparing for significant volatility today, as nearly $1.6 billion worth of Bitcoin (CRYPTO:BTC) and Ethereum (CRYPTO:ETH) options are set to expire. 

This coincides with the Federal Reserve’s recent decision to cut interest rates by 50 basis points (bps), which has already sparked a rally in crypto prices. 

According to data from Deribit, approximately $1.26 billion in Bitcoin options contracts will expire, with a put-to-call ratio of 0.85 and a maximum pain point of $58,500. 

The term "maximum pain" refers to the price level at which the most options expire worthless, causing the greatest financial impact on traders. 

Similarly, Ethereum options worth $308.16 million will expire, with a maximum pain point of $2,350 and a put-to-call ratio of 0.65, indicating market sentiment that leans slightly toward price increases. 

The Federal Reserve’s rate cut has already had a noticeable effect on the market. 

Bitcoin surged past the $63,500 mark, rising from $59,000, while Ethereum jumped from $2,293 to $2,482. 

Both assets have since stabilized, with Bitcoin trading at $62,890 and Ethereum at $2,450 at the time of writing. 

Analysts at Greeks.live observed a significant drop in implied volatility across all major maturities following the Fed’s decision, with short-term volatility declining by over 25%. 

They noted that market expectations for a sharp short-term selloff had subsided. 

Despite the current upward momentum, traders are advised to remain cautious. 

Historically, options expirations often lead to short-term market fluctuations, and the next few days will determine whether Bitcoin and Ethereum can sustain their growth or enter a period of correction. 

At press time, the Bitcoin price was $62,970.48, while the Ethereum price was $2,451.34.