Bitcoin Options Expiry: Could $8.3B Event Spark a Market Decline?
A significant batch of Bitcoin and Ether options is set to expire, raising concerns about potential market movements.
The end of another week approaches, marking the expiration of numerous Bitcoin and Ethereum options contracts. Approximately 91,000 Bitcoin options are set to expire on January 30, valued at roughly $8.3 billion, outstripping other events this month as it’s the final expiration for January.
The cryptocurrency market has seen a decline of around $215 billion since the week’s onset. The Federal Reserve has maintained US interest rates between 3.5% and 3.75%, surpassing their 2% target, while escalating geopolitical tensions in the Middle East have added to market anxiety.
Bitcoin Options Expiry
This week’s options batch exhibits a put/call ratio of 0.54, indicating a higher number of expiring calls (long positions) compared to puts (short positions). According to Coinglass, the maximum pain point lies around $90,000, which is above current market prices, meaning many trades could expire worthless.
Open interest in Bitcoin options remains high at $100,000, equating to $1.9 billion in value on the Deribit exchange, with substantial open interests at $75,000, $80,000, and $85,000 amid growing bearish sentiments.
The total open interest from Bitcoin options across all exchanges has surged to $58 billion since the beginning of the year.
“Expiry could amplify movements around key levels, especially in pain zones,” stated Deribit, which appears applicable as spot prices are declining.
馃毃 Options Expiry Alert 馃毃
At 8:00 UTC tomorrow, over $9.5B in crypto options are set to expire.
$BTC: $8.27B notional | Put/Call: 0.54 | Max Pain: $90K
$ETH: $1.27B notional | Put/Call: 0.74 | Max Pain: $3.1K
BTC is trading sideways just below $90K heading into expiry.
Spot Market Outlook
During the trading session in Asia on Friday, the cryptocurrency markets encountered a downturn, with overall capitalization dipping below $3 trillion for the first time since mid-December. More worrisome is that this represents the lowest level since April, indicating a full-fledged bear market.
Bitcoin dropped 8% to around $81,300, and Ethereum prices fell 9% to approximately $2,700, amidst significant losses across altcoins.
In addition to Bitcoin’s expiries, around 440,000 Ethereum contracts amounting to $1.3 billion are also set to expire, with a maximum pain of $3,100 and a put/call ratio of 0.74. The total value of crypto options expiries is approximately $9.6 billion.
