Bitcoin Options Expiry Looming
Over $10 billion in Bitcoin options are scheduled to expire on Friday at 08:00 UTC on Deribit, raising concerns about potential market volatility. The critical range lies between $95,000 and $105,000, which is particularly important for traders due to high delta exposure that indicates directional risk for Bitcoin’s price.
Recent market trends have seen Bitcoin reaching remarkable heights, yet Deribit’s DVOL index suggests traders are not overly concerned about the volatility from this options expiration.
Key Takeaways:
- Bitcoin options worth over $10 billion are expiring on Friday, impacting the $95K-$105K range significantly.
- Currently, about 93,131 bitcoin options contracts are set to settle with a majority being call options, pointing to a bullish sentiment.
- There is a notable accumulation of delta exposure around the $95K, $100K, and $105K contracts, which poses a substantial risk to Bitcoin’s price direction.
Gammas are expected to peak as expiration time approaches, meaning that any price movement might cause further market actions like hedging from both investors and market makers, potentially increasing volatility.
“The largest delta concentration is in Deribit BTC’s May 30 expiry, with $2.8B delta exposure led by strikes at $100K, $105K, and $95K, which has a potential for strong gamma-driven flows into month-end,” said Volmex, a decentralized crypto trading platform.
With Bitcoin’s current price hovering around $107,700, having previously crossed $111,000, traders are bracing for volatility as the options expiration nears. The DVOL index reflects a general expectation of low volatility going into the event.
