Bitcoin Options Expiry: Will Markets Slide Further?

Bitcoin dominates headlines today as $1.8 billion worth of Bitcoin options contracts are set to expire, marking a pivotal moment for the crypto market. Approximately 19,300 Bitcoin options contracts will expire on January 10, potentially influencing market dynamics after a week of declining prices.

Bitcoin Options Expiry: Key Insights

The current tranche of Bitcoin options contracts has a put/call ratio of 0.65, indicating a higher volume of bullish call contracts compared to bearish put contracts. Open interest (OI) remains highest at the $120,000 strike price, with $1.48 billion in value, followed by $1 billion at the $100,000 and $110,000 levels, signaling optimism among traders.
Despite the bullish sentiment in options trading, Bitcoin’s recent price action reflects uncertainty. Deribit, a leading crypto options exchange, notes reduced enthusiasm in leveraged positions compared to previous six-figure rallies. Traders are split between buying calls and shorting Bitcoin (puts), adding to the market’s cautious tone.

Crypto Market Faces Deeper Correction

Bitcoin’s broader influence on the crypto market remains evident as its price dipped to $91,250 before recovering to $93,000 during Asian trading hours. However, the asset is still down 2% in the last 24 hours and has lost 9% since peaking above $100,000 on January 7. The asset is nearing the lower bounds of its sideways trading channel established in mid-November.
Ethereum and other altcoins have also faced significant losses, driven by inflation concerns and fears of a potential selloff by the U.S. government. Meanwhile, today’s Bitcoin options expiry coincides with 140,000 Ethereum options contracts, collectively valued at $455 million, adding to the day’s $2.2 billion crypto options expiry.

Bitcoin remains under pressure to hold its critical support levels. A breakdown below the lower bounds of its trading channel could spark further downside, while a recovery above $93,000 might stabilize market sentiment. The crypto world watches closely as today’s options expiry could shape Bitcoin’s next move.

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