Bitcoin options expiry is an event that can have a significant impact on the Cryptocurrency market. This Friday, September 13, around 23,000 BTC options contracts expired, with a notional value of approximately $1.34 billion.
This event is roughly twice the size of last week’s expiry. Such a scenario suggests that its effect on cryptocurrency markets could be more pronounced. All data in this work was taken from Deribit.
Bitcoin Options Expiration Context
Bitcoin options expiry is a crucial moment for traders as it can trigger significant price movements. In this case, the put/call ratio for these trades stood at 0.86. In that sense, this indicates that there were slightly more call contracts than put contracts being issued, although they are fairly balanced.
This could therefore be interpreted as a slight inclination towards optimism in the market, although the difference is not overwhelming. On the other hand, there is high activity in open contracts (open interest) at price levels of $70,000 and $75,000.
The latter include $627 million and $638 million, respectively. Consequently, this suggests that many traders are betting on the Bitcoin price holding or surpassing these levels. Additionally, there is a notable open interest of $751 million at the $90,000 strike price and $930 million at $100,000.
The latest scenario shows that Bitcoin options traders did not rule out a strong rally for the coin. Overall, this all indicates that Friday’s expiration could certainly have an impact on how investors perceive the current cryptocurrency market conditions.
More than 23,000 Bitcoin options expire this Friday. Source: Deribit
Crypto Market Sentiment
Despite the activity in the options market, the Bitcoin Fear and Greed Index remains at “fear” (32). Thus, this shows that the market sentiment remains cautious.
Over the past 24 hours, the total cryptocurrency market cap remains flat at $2.13 trillion. Meanwhile, the price of Bitcoin is hovering between an intraday low of $57,300 and around $58,400 per coin. This limited range suggests that the market is in a state of indecision, unable to break through key resistance levels.
At the time of writing, the price of the largest cryptocurrency is $58,151 per unit, according to CoinMarketCap. Meanwhile, its 24-hour performance is +0.08% and +3.99% in a week.
Bitcoin price remains above $58,000 per coin on Friday. Source: CoinMarketCap
Implications of this Friday’s expiration
Options expiration can influence the price of Bitcoin in several ways. Historically, these events lead to significant volatility, which tends to result in price movements that may not reflect the underlying fundamentals of the market.
Before the expiration, some traders probably tried to manipulate prices to maximize their profits or minimize their losses. This resulted in noticeable volatility in the BTC price over the past few days, although it had other apparent causes.
The Bitcoin options expiry context can generally offer trading opportunities for those looking to profit from volatility. However, traders should be cautious, as activity around options expiry can result in sudden price drops.
It is not uncommon for sudden drops resulting from the latter scenario to punish unsuspecting traders. Either way, this market is highly influenced by the volatility and risk involved in the options-based cryptocurrency sector. Today’s expiry at 8:00 GMT may have extended effects throughout the day.
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