Will Bitcoin Continue Falling After $1.4B BTC Options Expiration?

On Friday, August 16, around 24,300 Bitcoin options contracts, with a theoretical value of around $1.4 billion, will expire.

Today’s options expiration event is smaller than last week’s, so its impact on spot markets is likely to be limited. The much larger end-of-month expiration event currently has a notional value of $3.2 billion.

Expiration of Bitcoin Options

This week’s stretch of Bitcoin options contracts has a put/call ratio of 0.82, meaning the longs and shorts are more aligned with slightly longer (call) expiring contracts than the shorts ( wells).

Peak pain, or the point where most losses will occur, is $59,500, which is just above current spot prices after today’s declines.

There is still a lot of open interest (OI), or contracts that have not yet expired, between $65,000 and $75,000, with almost $700 million at this last level. There is also more than $900 million in OI at the $100,000 strike price, according to Deribit.

Crypto derivatives provider Greeks Live commented that with the release of the US PPI and CPI reports, “market volatility expectations fell significantly, which in turn led to significant drops in IVs (volatility implied) on all principal maturities.”

He added that the drop in IV crypto derivatives could lead to a more stable period.

“The recent options market is gradually reducing expectations of future volatility, and the market will gradually enter a stable period.”

August 16 Options data
24,000 BTC options are about to expire with a Put Call ratio of 0.83, a Maxpain point of $59,500 and a theoretical value of $1.4 billion.
184,000 ETH options are about to expire with a Put Call ratio of 0.80, a Maxpain point of $2650 and a notional value of $470… pic.twitter.com/70UvUSo09W

— Greeks.live (@GreeksLive) August 16, 2024

In addition to the above, 184,000 Ethereum options, with a theoretical value of $470 million, are about to expire.

These have a put/call ratio of 0.80 and a maximum pain point of $2,650, which is quite close to market prices.

Crypto market outlook

Markets have declined 2.2% over the past 12 hours, with total market capitalization falling to $2.15 trillion, its lowest point since last week’s rally.

Bitcoin hit an intraday low of $56,650 before rallying to regain $58,000 during the Asian trading session on Friday morning. Analysts and the liquidity heatmap have highlighted this level as crucial support.

Ethereum continues to weaken in a drop to $2,532 before rallying to recapture $2,600 over the past few hours.

As usual, altcoins are a sea of ​​red and continue to bask in bear market malaise.

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