Crypto Markets Brace for Volatility as $14B Options Expiry Approaches
A massive options expiry event could trigger price swings in the crypto market, with traders closely watching for potential risks and opportunities.
By Tylt Editorial Team
Over $14 billion worth of options are set to expire on March 28, 2025.
Increased volatility is expected as traders adjust positions.
Technical indicators suggest heightened trading activity and potential market shifts.
The cryptocurrency market is bracing for a significant event as over $14 billion worth of options are set to expire on March 28, 2025. Historically, such large-scale expirations have led to increased volatility, with traders adjusting their positions to hedge against potential risks or capitalize on price swings. As the expiry date approaches, market participants are closely monitoring trading volumes, liquidity shifts, and technical indicators to gauge the potential impact.
Recent data indicates heightened trader activity, with Bitcoin’s 24-hour trading volume on Binance reaching $35 billion on March 26, a 20% increase from the previous day. A similar trend is observed in Ethereum’s trading pairs, suggesting that traders are actively positioning themselves ahead of the expiry event. Additionally, implied volatility for Bitcoin options has surged to 65%, up from 55% a week earlier, reinforcing expectations of significant price movements.
Technical indicators also point to potential shifts. Bitcoin’s Relative Strength Index (RSI) has risen to 72, signaling overbought conditions, while a bearish MACD crossover suggests that a correction might be on the horizon. Furthermore, on-chain data shows Bitcoin’s Network Value to Transactions (NVT) ratio increasing, hinting at a possible overvaluation.
Given these indicators, traders are advised to proceed with caution. The expiry’s proximity to the weekend could further amplify price fluctuations as liquidity thins out. Market participants should be prepared for increased volatility, whether through strategic hedging or risk management strategies.
In the broader market, AI-related cryptocurrencies have shown resilience, with AI tokens like SingularityNET (AGIX) and Fetch.AI (FET) experiencing increased trading volumes following a new AI-driven trading platform announcement. While not directly tied to the options expiry, the correlation between AI tokens and major cryptocurrencies remains strong, indicating that any market-wide movement could ripple through the sector.
As Friday’s massive options expiry approaches, traders should stay vigilant and be ready for swift market reactions. The event presents both opportunities and risks, making it a crucial moment for market participants to navigate with careful strategy.
