Bitcoin Options Expiry: What to Expect
Today, around 29,000 Bitcoin options contracts will expire with a notional value of approximately $2 billion. This expiry event is slightly smaller than last week’s, but a much larger one worth over $6 billion is scheduled for the end of March.
Put/Call Ratio and Max Pain Point
The put/call ratio for today’s Bitcoin options expiry is 0.86, indicating that the sellers of long and short contracts are relatively evenly matched.
The max pain point, which is the price at which most losses will occur upon expiry, is $60,000. Deribit data also reveals that there is significant open interest at the $65,000 and $70,000 strike prices, with a combined notional value of $1.9 billion.
Market Volatility and Implied Volatility
This week, market volatility in the crypto space reached its highest level in nearly a year. All major term implied volatility (IV) is trending significantly higher, with ultra-short-term IVs even reaching 100% at one point.
Implied volatility is a metric used to forecast the market’s expectations about the future price movements of an option’s underlying asset.
“Options volume and positions have risen, and the advantages of options have been very clear recently, with protected options for spot buyers and high leverage for long and short buyers, all of which are trading tools with very high profit/loss ratios.”
Ethereum Options Expiry
In addition to the Bitcoin contracts, around 270,000 Ethereum options are set to expire with a put/call ratio of 0.55. These options have a notional value of $1.05 billion and a max pain point of $2,950.
Deribit data shows that there is significant open interest at the $3,000 and $4,000 strike prices, with the latter having a greater value at $826 million.
Crypto Market Update
The overall crypto market capitalization has increased by 2.2% to reach $2.67 trillion. Bitcoin is approaching the $67,000 mark, following a daily increase of 1.8%. Ethereum is performing even better today, with a 3.6% increase pushing its price over $3,900 for the first time in over two years.
However, the two biggest gainers of the day are Binance Coin (BNB), which has added 10% to reach $468, and Shiba Inu (SHIB), which has surged by 11% as it aims to secure a top ten position by market cap.
Hot Take: Will Bitcoin Prices Rise or Correct?
With Bitcoin reaching an all-time high of over $69,000 this week and a significant options expiry event taking place today, it raises the question: Will Bitcoin prices continue to rise or initiate a correction?
The current options expiry event involves 29,000 Bitcoin contracts with a notional value of around $2 billion. The put/call ratio indicates that sellers of long and short contracts are relatively evenly matched.
Furthermore, the max pain point is at $60,000, which means that this could be a critical level to watch for potential price movements.
Market volatility in the crypto space has been high, with implied volatility reaching significant levels. This suggests that there may be expectations of large price swings in the near future.
It is also worth noting that a much larger options expiry event worth over $6 billion is scheduled for the end of March. This could potentially have a more substantial impact on Bitcoin prices.
Overall, the combination of the current options expiry and market conditions suggests that there could be significant price movements in the coming days. It remains to be seen whether Bitcoin will continue its upward trend or experience a correction.
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