Will Crypto Markets Recover When $3.4B Bitcoin Options Expire Today?

About 38,500 Bitcoin options contracts will expire on Friday, November 15, and have a theoretical value of about $3.4 billion.

Today’s option expiration is quite similar in magnitude to last week’s as markets have remained buoyant for most of the week.

However, analysts have warned that a correction is expected after the biggest rally for about eight months.

Expiration of Bitcoin Options

This week’s tranche of Bitcoin options contracts has a put/call ratio of 0.84, meaning there are slightly more long (calls) expirations than short (puts) expirations.

Also, open interest (OI), or the value or number of open options contracts that have not yet expired, is high at the $80,000, $90,000, and $100,000 strike prices, all within the range of possibility after this week’s bombshell.

Earlier this week, crypto derivatives provider Greeks Live commented that market sentiment has not reached peak FOMO (fear of missing out), adding that “options investors are still tentative to build positions and 90,000 and 100,000 accumulated a large number of option positions.”

If Bitcoin breaks above $100,000, it is “very likely to cause FOMO in the options market, which will lead to an increase in IV (implied volatility),” he added.

Bitcoin OI by Expiry. Source: Deribit

However, ETH’s breakout price will be $4,000, “which is still far away and can only follow BTC for now,” the Greeks noted. There are around 189,000 Ethereum contracts expiring today in addition to the large batch of Bitcoin options.

These have a notional value of $582 million and a put/call ratio of 0.92, bringing the notional expiration value of Friday’s combined crypto options to about $4 billion.

In its weekly crypto derivatives summary, analyst firm Block Scholes commented:

“Both BTC and ETH are now benefiting from a powerful combination of spot price gains and solid bullish derivatives activity, indicating strong demand to participate in further upside potential.”

Cool crypto markets

Crypto markets retreated towards the end of the week, with total market capitalization down 3.3% on the day but remaining above $3 trillion.

Bitcoin is down 2%, hitting an intraday low of $87,000 before recovering marginally during Friday morning’s Asian trading session to reach $88,000 at the time of writing.

Ethereum corrected more strongly, down 4% in a dip to just over $3,000, where it remains at the time of writing.

Altcoins were mostly in the red apart from XRP, Cardano (ADA), Near Protocol (NEAR), Litecoin (LTC) and Stellar (XLM).

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