Bitcoin Options Expiry: Will it Impact Prices?
Bitcoin is currently experiencing a retreat from its recent all-time high of $73,580. The big question now is whether the upcoming expiry event for Bitcoin options will further drive prices down. Today, around 30,600 Bitcoin options contracts with a notional value of approximately $2.45 billion will expire. While this week’s expiry event is slightly larger than the previous week’s, a massive event worth nearly $10 billion is set to occur at the end of March.
The Put/Call Ratio and Open Interest
The put/call ratio for today’s batch of Bitcoin options stands at 0.78. This means that there are slightly more calls (long contracts) being sold compared to puts (shorts). Notably, there is significant open interest (OI) at the $65,000 strike price, totaling $1.1 billion in notional value according to Deribit. Additionally, there is almost $1 billion in OI at both the $60,000 and $70,000 strike prices.
Greeks Live, a crypto derivatives tooling provider, has observed that BTC has already started declining “with a recent change in market tempo.” They note that the majority of declines are occurring during the US trading session, while gains are seen during the Asian trading session. Greeks Live also suggests that market sentiment may be weakening due to a lack of direction in block options orders and significant declines in implied volatility (IV).
Ethereum Options Expiry
In addition to Bitcoin options, approximately 331,000 Ethereum options contracts are also set to expire today. These contracts have a notional value of $1.2 billion and a put/call ratio of 0.69. Similar to Bitcoin options, there is a considerable amount of open interest at the $4,000 strike price for Ethereum contracts, as well as at the $3,000 strike price.
Crypto Markets Experience a Decline
The overall cryptocurrency market has begun to slide, with total capitalization falling by 6.8% to $2.7 trillion during Friday morning’s Asian trading session. Bitcoin itself has plunged over 7% in a single day, dropping to $66,858 before recovering slightly to reclaim the $68,000 level.
Hot Take: Potential Impact of Options Expiry
The expiry event for Bitcoin and Ethereum options has the potential to impact market prices. Here are some key points to consider:
- Bitcoin options with a notional value of $2.45 billion will expire today.
- A larger expiry event worth nearly $10 billion is scheduled for the end of March.
- The put/call ratio for Bitcoin options is currently at 0.78, indicating more calls being sold than puts.
- There is significant open interest at the $65,000 strike price for Bitcoin options.
- Greeks Live suggests that BTC has already started declining and market sentiment may be weakening.
- Around 331,000 Ethereum options contracts with a notional value of $1.2 billion will also expire today.
- Ethereum options show a put/call ratio of 0.69.
- Both Bitcoin and Ethereum markets have experienced a decline in prices.
Given these factors, it is possible that the expiry event could contribute to further downward pressure on cryptocurrency prices. Traders and investors should closely monitor market developments and be prepared for potential volatility in the coming days.
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