Quick take:
- Over 460,000 Ethereum options expire this Friday, September 25th
- 90% of these options are held at Deribit
- Such a high number of ETH options expiring, coupled with a bearish crypto market, could result in the price of Ethereum dropping further
- ETH is correlated with Bitcoin, which is in turn correlated to the stock markets which are experiencing a pullback
Like its counterpart of Bitcoin, Ethereum has a record-breaking 460,000 ETH options expiring this Friday, September 25th. This number of Ethereum options has been captured in the following chart courtesy of Skew Analytics.
90% of the Expiring ETH Options are Held at Deribit
Also worth mentioning is that 90% of the expiring Ethereum options are held at Deribit. Additionally, of the record 87,000 Bitcoin options also expiring this Friday, 77% are also held at the Deribit exchange. This information was shared by Deribit via the following tweet.
UPCOMING BIG QUARTERLY EXPIRY!
87k $BTC options are set to expire this Friday of which 67k (77%) is held at Deribit.
This number beats August’s record of 65k $BTC options!
— Deribit (@DeribitExchange) September 21, 2020
Ethereum’s and Bitcoin’s Price Drops are Linked to the Stock Market Pullback
Since late Sunday, both Ethereum and Bitcoin have experienced significant volatility in the crypto markets. In the case of ETH, its price has taken a drastic dip from the $390 price range to a local low of $330. At the time of writing, Ethereum is trading at $340 and its price this week could further be influenced to the downside by the record number of ETH options expiring this Friday.
Ethereum’s woes in the crypto markets could be further amplified by its correlation with both Bitcoin and the traditional stock markets. The latter has experienced a massive pullback as a result of new Coronavirus cases in Europe triggering fears of a possible second lockdown in major cities.
The recent correlation between the crypto and stock markets was captured by the team at Santiment via the following statement.
#Altcoins took another massive blow today (Sept 21st), as both traditional markets and gold’s price took a massive hit as markets opened.
As has been the case since Black Thursday, the correlation between the US stock markets & gold, and $BTC, $ETH, and rest of the #crypto markets has been much higher now than any year in #crypto‘s history.
Furthermore, there is anxiety that the Trump administration might not have time, to pass another stimulus bill passed due to the events surrounding the nomination of a new Supreme Court Judge. This means that the stock markets might not find adequate relief until after the November elections.