Bitcoin Options Expiry Sparks Speculation
Friday marks the expiry of Bitcoin options contracts worth nearly $1 billion. This event comes after a week of market retreat, leaving many wondering if it will lead to an upward movement in crypto markets.
According to Deribit, around 21,900 Bitcoin options contracts are set to expire on January 5. Although this is smaller than last week’s expiry, which marked the end of the year.
The Notional Value and Put/Call Ratio
The notional value of today’s batch of Bitcoin contracts is approximately $955 million on Deribit. The put/call ratio for this batch is 0.62, indicating that there are more long (call) contracts expiring than short (put) contracts.
The $43,000 mark remains the max pain point, but there is significant interest in the $50,000 strike price with 23,884 calls.
Larger Concentration at $50,000
The presence of a large concentration of call options at $50,000 suggests that traders are anticipating a rise in BTC prices by the end of January.
Total open interest (OI) has decreased from last year’s record levels to around $10.7 billion on Deribit.
Greeks Live mentioned the possibility of the SEC rejecting spot Bitcoin ETFs next week as a reason for the market retreat earlier this week. Options implied volatility dropped to 52% for the week and below 65% for the January 12 expiration.
Ethereum Derivatives Outlook
In addition to the Bitcoin options expiry, 255,245 Ethereum contracts will also expire on Deribit. These options have a notional value of $574 million, and the put/call ratio is 0.54.
Spot markets have remained flat during Friday morning trading in Asia, with total capitalization staying at $1.73 trillion.
Hot Take: Impact on Spot Prices and ETF Scene
While it is unlikely that today’s expiring Bitcoin options will directly impact spot prices, all eyes are on the ETF scene. Traders are eagerly awaiting news regarding the SEC’s decision on spot Bitcoin ETFs next week.
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