Crypto Market Awaits Major Expiry Events Amid Signs of Recovery

The crypto market is on high alert as participants brace for significant events, including crypto options expiry, the release of the US Personal Consumption Expenditures (PCE) inflation data, and the announcement of Q4 GDP figures. Additionally, escalating tensions from the ongoing US-Iran war add a layer of uncertainty to market dynamics. Yet, amidst this climate, analysts have observed potential signs of recovery, characterized by substantial short liquidations and indicators of seller exhaustion on-chain. The pressing question is whether major cryptocurrencies like Bitcoin, Ethereum (ETH), XRP, and Solana will rebound to their respective max pain prices today.

Bitcoin: Hope for a Rebound

Bitcoin is set to experience the expiry of approximately 30,000 options with a staggering notional value of $2.06 billion on the Deribit derivatives platform. Current statistics reveal a put-call ratio of 0.57, signaling a bullish sentiment among traders and traditional finance (TradFi) institutions. In the last 24 hours, the call volume has outstripped put volume, exemplified by a put/call ratio of 0.90. This buy-the-dip sentiment is bolstered by anticipation surrounding the upcoming US PCE inflation data.

Currently trading around $67,800, Bitcoin has surged more than 2% recently, attempting to break above the significant 200-hourly moving average, noted at $67,957. Should Bitcoin successfully reclaim this level, it could pave the way for a movement toward its max pain price of $70,000. Data from Deribit indicates that there is a staggering probability of more than 97% for Bitcoin to expire above the $67,500 strike price, suggesting a potentially optimistic outlook in the near term.

Ethereum’s Dynamics

Ethereum is also witnessing crucial options expiry today, with contracts worth $414 million in notional value about to settle. The current put-call ratio stands at 0.72, indicating a favorable lean towards the bullish side. With the current market price at $1,962, Ethereum’s max pain price is set at $2,025, suggesting a room for upward movement. The ETH 25-delta skew has experienced a slight rise, reflecting potential bullish sentiment alongside increased implied volatility.

In the past 24 hours, the total futures open interest for ETH across various crypto derivatives exchanges has seen a modest increase of 1.50%, climbing to $24.27 billion. The noteworthy inflow indicates significant buying activity, particularly observed on the CME, where open interest surged nearly 4%. As traders digest macroeconomic data, the heightened buy-the-dip sentiment could indeed support a recovery in Ethereum.

XRP’s Struggles

For XRP, the options set to expire today hold a notional value of $5.16 million, and its prevailing put-call ratio sits at a bearish 1.33. The max pain price for XRP is $1.40, slightly below the current trading level of $1.42. Although the overall sentiment for XRP appears bearish, an upward shift in the broader cryptocurrency market could push XRP’s value closer to $1.50. Conversely, any significant selloff or profit-taking could drag XRP down to its max pain level at $1.38, underlining the fragile state of its market dynamics.

Solana Sees Positivity

Solana’s position appears more optimistic, with the max pain price resting at $84. Currently trading at around $83.50, Solana has risen by over 4% in the past 24 hours, demonstrating resilience as traders eye a potential recovery. However, trading volume remains somewhat muted as crypto options expiry approaches. A noteworthy development is the recent influx of $6 million into a Solana ETF, alongside $5.5 million flowing into the Bitwise Solana Staking ETF (BSOL). With financial institutions like Morgan Stanley indicating significant holdings in these ETFs, Solana’s market outlook seems promising, particularly as tokenized real-world assets (RWAs) on its network approach a staggering valuation of $1.66 billion.

Short Liquidations Signal Market Sentiment

Recent data from CoinGlass reveals a wave of short liquidations across the crypto space, affecting over 82,000 traders in just the past 24 hours. Among these, a notable liquidation order of ETH-USDT, valued at $2.92 million, marked one of the largest single short liquidations on Binance. Bitcoin itself experienced $30 million worth of short positions being liquidated, underscoring market volatility. Other cryptocurrencies like ETH, XRP, and Solana also faced a series of short liquidations over the preceding twelve hours.

On-chain analytics from Santiment highlight a concerning trend; wallets containing 10 to 1000 Bitcoin have decreased their holdings by 0.8% since October, whereas wallets with less than 0.01 Bitcoin have accumulated an additional 2.5%. This divergence may reflect shifting investor sentiment, with larger holders potentially taking profit while smaller investors accumulate. Analysts are keeping a close watch on key resistance levels, particularly for Bitcoin, predicting potential prices upward of $73,000 if the support levels hold steady around the $65,000-$66,000 zone.

Conclusion

As the crypto market braces for pivotal expiry events and economic data releases, signs of recovery are beginning to surface amidst excessive short liquidations and a shift in market sentiment. Bitcoin, Ethereum, XRP, and Solana are all at critical junctures, with their respective max pain prices serving as benchmarks for potential rebounds. While external factors, such as geopolitical tensions and inflation data, loom large, the current bullish indicators among traders suggest that a recovery may be on the horizon. Investors will be keenly observing how these events unfold and their subsequent impact on price trajectories in the ever-evolving landscape of cryptocurrency.