How Will Crypto Markets React To $1.1 Billion Bitcoin Options Expiring Today?

About 18,400 Bitcoin options contracts expire on Friday, August 23. They have a theoretical value of about $1.1 billion.

Today’s options expiration event is somewhat smaller than last week’s, so its impact on spot markets is likely to be limited. The much larger month-end expiration event next week has a theoretical value of $3.5 billion.

Expiration of Bitcoin Options

This week’s batch of Bitcoin options contracts has a put/call ratio of 0.83, meaning the longs and shorts are more aligned with slightly longer (call) expiring contracts than the shorts (shit). Peak pain, or the point where the most losses will occur, is $60,000, which is very close to current spot prices.

Open interest, or the number of securities in contracts that have not yet expired, remains high at strike prices above $70,000, according to Deribit. Additionally, there is around $967 million in OI at the $100,000 strike price, with bulls waiting for a big BTC price rally.

On August 22, crypto derivatives provider Greeks Live commented that this week’s macro data and events “didn’t make too many waves.” He added that the historical volatility (RV) of cryptocurrencies continued to decline, “and options market volatility expectations are gradually decreasing.”

“Options data suggests that the market is in a very quiet cycle, with a strong term structure and an expectation of future volatility in the options market that is gradually diminishing.”

August 23 Options data
18,000 BTC options are about to expire with a Put Call ratio of 0.83, a Maxpain point of $60,000 and a notional value of $1.12 billion.
140,000 ETH options are about to expire with a Put Call ratio of 0.93, a Maxpain point of $26.25 and a notional value of $370… pic.twitter.com/qIS2CWer13

— Greeks.live (@GreeksLive) August 23, 2024

In addition to Bitcoin options expiring today, there are 140,000 Ethereum options about to expire. These have a notional value of $370 million, a put/call ratio of 0.93, and a maximum pain point of $2,625.

Crypto market outlook

With a bearish options expiration event and markets remaining relatively flat, there is unlikely to be much impact unless there are big surprises in today’s Fed speech in Jackson Hole.

Total crypto capitalization was flat on the day at $2.24 trillion, after gradually declining since mid-March. Bitcoin has held above $60,000 for the past 24 hours and was trading at $60,654 at the time of writing.

Ethereum rose 1.2% on the day, changing hands at $2,634 during the Asian trading session on Friday morning.

Altcoins were generally in the green, with Binance Coin (BNB), Avalanche (AVAX), and Near Protocol (NEAR) outperforming the market at the moment.

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