$2.2B Crypto Options Are Expiring Today, Will Markets React?

Around 21,000 Bitcoin options contracts will expire on Friday, Jan. 2, and they have a notional value of roughly $1.85 billion.

This expiry event is much smaller than average due to muted trading over the holiday period and the huge one last Friday. Trading has been subdued over the New Year holiday as expected, with volume and volatility low, and spot markets mostly sideways as we start a new month and a new year.

Bitcoin Options Expiry

This week’s small tranche of Bitcoin options contracts has a put/call ratio of 0.48, meaning that there are a lot more calls (longs) expiring than puts (shorts). Max pain is around $88,000, 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, is highest at $100,000, which has $1.3 billion at this strike price on Deribit. There remains around $1.1 billion in OI at $75,000 and $80,000 as bearish bets mount up.

Total BTC options OI across all exchanges is at $28 billion, much lower now after last week’s massive expiry.

“Overall, market liquidity remains subdued, and sentiment is pessimistic,” said crypto derivatives provider Greeks Live in a market update earlier this week.

In addition to today’s batch of Bitcoin options, around 130,000 Ethereum contracts are also expiring, with a notional value of $396 million, max pain at $2,950, and a put/call ratio of 0.62. Total ETH options OI across all exchanges is around $6.7 billion, around a third of what it was in late August.

Spot Market Outlook

Nothing has really changed over the past month, observed analyst ‘Credibull Crypto’ on Friday.

The $74,000 support level remains unbroken, “and there are a number of indications that we are forming a bottom here,” they added.

Analyst ‘Daan Crypto Trades’ observed the new monthly and yearly candle, stating, “You can assume that this candle will at least extend a bit further in both directions throughout the month. Generally, that first week especially does tend to give some fakeouts.”

BTC has steadily gained over the past 24 hours, rising 1.3% to come just shy of $89,000 during the Friday morning Asian trading session. However, this price level has shown strong resistance over the past week.

ETH prices reclaimed $3,000 on Friday morning following a 1.7% gain on the day as trading in Asia started off positive. Altcoins were mostly in the green at the time of writing, with larger gains for Dogecoin, Cardano, Chainlink, and Avalanche.

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