Big Bitcoin Options Expiry Event: Will It Push Prices Higher or Initiate a Correction?
On March 1, around 32,200 Bitcoin options contracts will expire. This is the second-largest expiry event of the month, with another massive event worth over $6 billion scheduled for the end of March. The notional value of the expiring Bitcoin options is $1.96 billion, as reported by crypto derivatives provider Deribit.
Key Points:
- 32,200 Bitcoin options contracts are set to expire on March 1
- The notional value of these contracts is $1.96 billion
- The put/call ratio suggests a market correction
- The max pain point is $55,000
- The $60,000 strike price remains significant with more calls than puts
- Open interest on Deribit reached an all-time high of $29 billion
- Greeks Live reported a record-high options volume of $620 million on Feb. 29
- 235,000 Ethereum contracts are also expiring with a notional value of $793 million
- Total crypto market capitalization is currently at $2.37 trillion
- Bitcoin and Ethereum prices have pulled back
Big Bitcoin Options Day: Market Sentiment and Strike Prices
The put/call ratio for the expiring Bitcoin options is 1.49, indicating that there are more sellers of short contracts (puts) than buyers of long contracts (calls). This suggests that derivatives traders are leaning towards a market correction. The max pain point, which represents the price at which most losses will occur upon expiry, is $55,000.
However, the $60,000 strike price is still highly significant. At this point, there are 15,329 calls with a notional value of $934 million. The put/call ratio for this strike price is just 0.20, indicating that the bulls heavily outnumber the bears who are shorting at this level.
Another strike price of interest is $65,000, which has 14,137 calls and a notional value of $861 million according to Deribit.
Deribit also reported that open interest reached an all-time high of $29 billion on Feb. 29. Open interest refers to the total number of open derivative contracts, such as options or futures, that have not been settled.
Crypto Market Outlook: Retreat and Cooling Markets
The total capitalization of the crypto market currently stands at $2.37 trillion. Bitcoin has pulled back to $60,878 at the time of writing, and Ethereum has dipped to $3,372 as it follows Bitcoinโs lead. After a week of rallying, it appears that the market is due for a correction.
Given these factors, it is unlikely that the options expiry event will have a significant impact on spot markets.
Hot Take: Whatโs Next for Bitcoin?
With Bitcoin tapping $64,000 this week and the big expiry event approaching, many are wondering whether prices will continue to rise or if a correction is imminent. The options market provides some insights into market sentiment and potential price levels.
The put/call ratio suggests that traders are leaning towards a correction in the market. However, the significant number of calls at the $60,000 strike price indicates strong bullish sentiment. Additionally, open interest on Deribit has reached an all-time high, indicating growing interest in Bitcoin derivatives.
As the options expiry event unfolds, it will be interesting to see how it impacts the overall market. Will it push prices higher or initiate a correction?
Stay tuned for more updates on the crypto market and the impact of options expiry events.
Owen Patter is a distinguished crypto analyst, accomplished researcher, and skilled editor, leaving a notable imprint on the cryptocurrency landscape. As a proficient crypto analyst and researcher, Owen delves into the intricate realms of digital assets, offering insights that resonate with a diverse audience. His analytical acuity is harmoniously paired with adept editorial skills, allowing him to transform complex crypto information into easily comprehensible content.