The crypto market may be setting up for short-term volatility this week due to the upcoming expiry of options contracts for Bitcoin and Ether. On October 22nd, total options contracts worth $4.2 billion for Bitcoin and $1 billion for Ether will expire on Deribit at 08:00 UTC.
According to data from Deribit, around 16% ($682 million) of the Bitcoin options are set to expire ‘in the money’, primarily consisting of call options. As options holders are incentivized to act, this might escalate market volatility as we approach the expiry date.
Key Highlights:
- Options expiry on Friday may intensify market fluctuations.
- BTC options worth over $682 million are set to expire in-the-money.
- A higher put/call ratio for Bitcoin indicates a prevailing bullish sentiment.
BTC’s current trading value is near $67,000, while Ether is close to its max pain level of $2,600. Some analysts believe Bitcoin could experience a downturn ahead of the options expiry, while Ether’s potential for significant drops may be restrained.
Outlook for the Options Market:
The options market has significantly expanded in recent years, though it still remains small compared to the spot market. Analysts anticipate that the market will continue to develop, particularly with institutional interest rising as seen in the recent approval of spot Bitcoin ETF options by the SEC. Jeff Park, from Bitwise Invest, described this development as ‘game-changing,’ suggesting more trading avenues will emerge as a result.
