The cryptocurrency derivatives market might see some volatility caused by the April 4 options expiry event

The cryptocurrency derivatives market might see some volatility caused by the April 4 options expiry event with Bitcoin and Ethereum at the forefront.

The cryptocurrency derivatives market is gearing up for a significant event with the April 4 options expiry on both Bitcoin and Ethereum. According to options data on Chain Analytics, around 26,000 Bitcoin options, valued at roughly $2.02 billion, are set to expire.

At 1.24, the put/call ratio indicates that more traders were focused on protecting themselves from downside risk. The max pain price, where options buyers experience the greatest financial loss, is calculated at $84,000.

This max pain point is interesting as it closely aligns with the current trading range of Bitcoin, suggesting a convergence towards a crucial area of interest.

As options expirations approach, prices often tend to move towards this level, which can cause a large buildup of volatility both before and after the event. In this case, the amount of $84,000 is highlighted as a possible short-term magnet, but the relatively balanced distribution of calls and puts also suggests uncertainty and a lack of significant directional bias.

On the other hand, Ethereum is set to see a more substantial expiration event with over 220,000 ETH options expiring. In contrast to BTC, there is stronger bearish sentiment indicated by a Put/Call Ratio of 1.42. ETH's max pain level is set at $1,850, representing its roughly $400 million notional value.

The technical chart of Ethereum shows that it has been circling just above this area, which could suggest that the options market was correctly anticipating a range of consolidation.

From a trading perspective, these expirations will eliminate speculative positions, decreasing open interest and potentially leading to more distinct market trends. Traders should monitor changes in volume and volatility closely after the expiration, especially if Bitcoin attempts to break through its short-term resistance at around $85,000.

Both Bitcoin and Ethereum appear to be stabilizing around their respective max pain points, which could indicate short-term consolidation while also setting the stage for the next directional move in the coming weeks.