The cryptocurrency market is on high alert as a massive $3.7 billion in Bitcoin options are scheduled to expire on November 8. This event comes on the heels of significant occurrences, such as the U.S. elections and the Federal Open Market Committee (FOMC) meeting. Such a substantial options expiry often has the potential to trigger significant market movements, including large-scale sell-offs.
Understanding the $3.7 Billion Bitcoin Options Expiry
According to recent data from Deribit, approximately 48,794 Bitcoin options contracts, valued at an estimated $3.7 billion, are set to expire today. These contracts display a put-to-call ratio of 0.72, indicating a relatively balanced division between bearish and bullish positions. Notably, the maximum pain point, which is the price level at which the most options would lose value, is positioned around $69,000.
There is a significant concentration of open interest (OI) at the $80,000 strike price, amounting to $1.7 billion. This suggests that a portion of traders remains hopeful about a potential price surge. Following the election results, trading volumes skyrocketed to a daily record of $60 billion, propelled by Donald Trump’s victory. Subsequently, BTC reached a new all-time high (ATH) of $76,940, showcasing the market’s optimistic sentiment.
Analysts Foresee Potential Profit-Taking
Crypto derivatives platform Greeks Live has observed a pattern of profit-taking in the options market, hinting that the election-driven rally might be nearing its conclusion. Despite substantial gains in both Bitcoin and Ether and an optimistic mood in the crypto market, the options market is witnessing a noticeable closure of profit-taking activities as the election period concludes.
Furthermore, Greeks Live reported a reduction in “doomsday” Bitcoin options, which enable investors to exit contracts prematurely. This reflects a shift towards a more positive market sentiment, indicating a potential change in investor outlook.
Ethereum Options Expiry and Market Dynamics
In tandem with Bitcoin’s significant expiry, around 294,000 Ethereum options contracts, valued at $850 million, are also slated to expire today. These contracts exhibit a put-to-call ratio of 0.65, with a maximum pain level at $2,500. Collectively, the options expiry for both Bitcoin and Ethereum amounts to nearly $4.5 billion.
In the wake of these expirations, Bitcoin and Ethereum have reached new pinnacles, with Bitcoin peaking at $76,872 and Ethereum rising to $2,950. While certain altcoins have cooled following recent rallies, Solana (SOL) and Cardano (ADA) continue to show resilience, registering increases of 5% and 14%, respectively.
