How Will Markets React to $2B Bitcoin Options Expiring Today?

Around 20,600 Bitcoin options contracts will expire on Friday, Jan. 9, with a notional value of roughly $1.9 billion.

This expiry event is pretty much the same as last week’s, as derivatives trading remains slow, so there is unlikely to be any impact on spot markets.

Spot markets started the week on a high, and momentum built to a seven-week high market cap of $3.3 on Wednesday, but it failed to continue, resulting in another pullback.

Bitcoin Options Expiry

This week’s small batch of Bitcoin options contracts has a put/call ratio of 1, meaning that calls (longs) and puts (shorts) are evenly matched. Max pain is around $90,000, according to Coinglass, which is pretty close to the current spot prices, so many will be in the money on expiry.

Open interest (OI), or the value or number of Bitcoin options contracts yet to expire, remains highest at $100,000, which has $1.8 billion at this strike price on Deribit. There remains around $1.2 billion in OI at $75,000, $80,000, and $85,000 as bearish bets mount up.

Total BTC options OI across all exchanges is creeping back up at $32.7 billion.

In addition to today’s batch of Bitcoin options, around 123,000 Ethereum contracts are also expiring, with a notional value of $384 million, max pain at $3,100, and a put/call ratio of 0.89. Total ETH options OI across all exchanges is around $7.9 billion.

This brings the total crypto options expiry notional value to around $2.2 billion.

Spot Market Outlook

Crypto markets have fallen back in the second half of this week, with the total cap currently at $3.19 trillion. Bitcoin fell below $89,500 briefly on Thursday before recovering to reclaim $91,000 during the Friday morning Asian trading session. However, it remains rangebound with heavy resistance above $94,000.

Ether prices have held steady above $3,000, reclaiming the resistance zone at $3,100 on Friday morning. Altcoins were predominantly in the red at the time of writing, with heavier losses for XRP, Dogecoin, and Zcash.

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