Ethereum Eyes $2,500 as $1.9B Options Expire—Will Q4 Spark a Bullish Breakout?

As the third quarter concludes, the crypto market is witnessing a pivotal moment with massive $5.8 billion Bitcoin and $1.9 billion Ethereum options expiring on September 27, 2024.

According to data shared by Greeks,.

Live and blockchain analyst Colin Wu, Bitcoin’s Put Call Ratio stands at 0.64, with a Max Pain point of $59,000, indicating a balance where options expire worthless for most holders. For Ethereum, the Put Call Ratio is 0.47, with a maximum Pain point of $2,500.

27 Sep Options Data
89,000 BTC options are about to expire with a Put Call Ratio of 0.64, a Maxpain point of $59,000 and a notional value of $5.8 billion.
718,000 ETH options are about to expire with a Put Call Ratio of 0.47, a Maxpain point of $2,500 and a notional value of $1.9… pic.twitter.com/JWD30gCE5w

— Greeks.live (@GreeksLive) September 27, 2024

This substantial expiry could significantly influence short-term volatility and market positioning as traders adjust their outlook for the fourth quarter.

Impact of Options Expiry on Market Dynamics

The third quarter options expiry has historically led to heightened market activity, characterized by shifting positions and adjustments in implied volatility (IV).

This time, analysts have observed that all major term IV levels remain low, a condition that often precedes sharp movements as traders position for the next quarter.

65% of the trades were call options, and 35% were put options, reflecting a generally bullish sentiment in the market.

In terms of expiration distribution, the breakdown was as follows:

• 42% expire within 1 day
• 25% within 7 days
• 24% within 9 days
• 7%… pic.twitter.com/C9Ej5K0a4T

— PowerTrade (@PowerTradeHQ) September 20, 2024

Additionally, the Federal Reserve’s recent 50 basis point rate cut has buoyed market sentiment, potentially laying the groundwork for a robust fourth-quarter performance.

Greeks. Live noted that, historically, the fourth quarter tends to bring positive returns for cryptocurrencies. The combination of lower IV and fresh market positioning opens up trading opportunities, suggesting that investors may see a continuation of recent bullish momentum.

Analysts Anticipate Q4 Gains for Bitcoin and Ethereum

Prominent market observers, including PlanB, creator of the Bitcoin stock-to-flow (S2F) model, are optimistic about Bitcoin’s trajectory in the coming months.

With the U.S. presidential election, anticipated institutional inflows from ETFs, and potential regulatory shifts, analysts are forecasting a strong upward trend for Bitcoin, targeting $70,000 by October and further gains toward the end of the year.

Global liquidity and the FNCI point in favorable directions, a solid setup for Q4.

PBOC’s stimulus package yesterday and the Fed’s cutting cycle point toward improved global liquidity conditions.

Additionally, looser-than-average conditions tend to see BTC strength. pic.twitter.com/bDMyj0RSFh

— K33 Research (@K33Research) September 24, 2024

Ethereum, currently trading at $2,644.51, also presents a positive technical outlook. The cryptocurrency is maintaining a rising channel formation, with immediate resistance at $2,667.56.

An RSI of 55.33 indicates that there is moderate bullish momentum, which could push Ethereum toward $2,692.20 and $2,718.26 if it breaks above this level.

Key Technical Levels to Watch:

• Bitcoin (BTC/USD): Max Pain at $59,000, signalling potential resistance.
• Ethereum (ETH/USD): Immediate support at $2,631.98, with bullish targets at $2,692.20.
• Bearish Sentiment Eases: Lower IV levels suggest a cautiously optimistic outlook.

With over $7.7 billion in options expiring, the stage is set for significant market movements as traders look to capitalize on renewed momentum.