Could Today’s Bitcoin Options Expire Reverse Market Momentum?

About 13,500 Bitcoin options contracts expire on Friday, September 6, with a theoretical value of about $776 million.

Today’s option expiration is relatively small compared to last week’s month-end, so the impact on spot markets is likely to be minimal.

Expiration of Bitcoin Options

This week’s stretch of Bitcoin options contracts has a put/call ratio of 0.82, meaning there are slightly more long contracts (calls) expiring than short contracts (puts).

Open interest, or the number of securities in contracts that have not yet expired, remains high at strike prices of $70,000 and $75,000, according to Deribit.

Also, there is around $720 million in OI at the $90,000 strike price and still $913 million at the $100,000 strike price, suggesting the bulls are still lining up for a rally towards the north

Bitcoin OI by Expiry. Source: Deribit

On September 5, crypto derivatives provider Greeks Live commented that market confidence continues to decline.

“In terms of options data, the main term Skews is turning to the downside and implied volatility is slightly higher. In general, options market expectations for the future are skewed towards near-term negativity” .

He added that positive developments are expected in the short term and that September has also been a weaker month.

In addition to this week’s Bitcoin options, there are about 126,000 Ethereum options expiring with a notional value of $304 million. These contracts have a put/call ratio of 0.63.

In general, options activity is waning as market sentiment continues to decline. Bitcoin’s Fear and Greed Index has slipped back into “extreme fear,” with the asset falling back below $56,000.

Bitcoin’s fear and greed index is 22. Extreme fear
Current price: $56,159 pic.twitter.com/jyrtLakbIi

— Bitcoin Fear and Greed Index (@BitcoinFear) September 6, 2024

Crypto market outlook

Another day in the red has seen total market capitalization decline a further 3% on the day to $2.08 trillion. It is now back to its lowest level since the Black Monday crash on August 5.

Bitcoin fell to an intraday low of $55,800 during early trading in Asia on Friday. However, it has since recovered up to $56,300 at the time of writing.

Former BitMEX CEO Arthur Hayes was bearish and predicted a weekend dump:

“BTC is heavy, I’m looking for less than $50,000 this weekend. I took a cheeky short.”

The rest of the market is in an equally bad place, with most of the high-cap altcoins losing a couple of percent today.

SPECIAL OFFER (Sponsored) Binance Free $600 (Exclusive to CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

2024 LIMITED OFFER on BYDFi Exchange – Up to $2888 Welcome Reward, Use this link to register and open a 100 USDT-M position for free!