Will $2.3B Bitcoin Options Expiry Accelerate The Correction? 

Approximately 23,400 Bitcoin options contracts will expire on Friday, Dec. 6, in the first expiry event of December.

They have a notional value of $2.3 billion, which is about a quarter of last month’s massive options expiry event. The end of December’s year-end event is also set to be a huge one.

Bitcoin Options Expiry

This week’s batch of Bitcoin options contracts has a max pain point of $97,000 and put/call ratio of 1.1, meaning that long (call) contract and short (put) contract sellers are evenly matched.

Open interest, or the value or number of options contracts yet to expire, is highest at the $100,000 strike price, with $2 billion in OI, but the $120,000 strike price is not far behind, according to Deribit.

“Nearly two weeks of options market data has been showing that market makers are more cautious, the impact of 100,000 plus today’s retracement so that the short-term IV (implied volatility) increased significantly, options are very suitable for the short-term game at this point in time now,” observed crypto derivatives provider Greeks Live.

6 Dec Options Delivery Data
23,000 BTC options expired with a Put Call Ratio of 1.11, a maxpain point of $97,000 and a notional value of $2.3 billion.
147,000 ETH options expired with a Put Call Ratio of 0.62, a maxpain of $3,500 and a notional value of $570 million.
Bitcoin… pic.twitter.com/APzvJ1ohe3

— Greeks.live (@GreeksLive) December 6, 2024

“From a price action standpoint, the rally could be sustained if traders take profit from their altcoins and rotate back into BTC and ETH,” reported Deribit earlier this week before BTC topped $100,000.

“With ETH within 1% of its five-month high, that would have the potential to reignite the momentum,” it added.

In addition to today’s Bitcoin options, around 147,000 Ethereum contracts are expiring today. These have a notional value of $569 million, a max pain of $3,500, and a put/call ratio of 0.62, meaning there are almost twice as many call contracts expiring than puts.

This brings Friday’s combined crypto options expiry notional value to around $2.8 billion.

Crypto Market Outlook

Nevertheless, crypto markets took a sharp dip in late trading on Dec. 5, with total capitalization shedding almost $200 billion in a fall from its all-time high of $3.88 trillion.

The move was driven by over-leveraged Bitcoin markets, causing the asset to dump below $100,000 in a flash crash below $93,000 on Dec. 5. Bitcoin hit an all-time high just below $104,000 yesterday.

However, the asset has since recovered to top $98,000 during the Friday morning Asian trading session.

Crypto options expiry events are unlikely to impact spot markets that much, though leverage flush-outs certainly do, as evidenced by the big correction.