Bitcoin Put-Call Ratio Turns Bearish Ahead of Friday's Quarterly Expiration
The put-call ratio for the bitcoin option on Deribit until today's expiration has increased to 1.66. A ratio greater than one means that significantly more put options are traded than call options. This indicates that more investors are betting or hedging against a price drop rather than a rise.
Deribit options data from late June shows 107,000 bitcoin options expiring with a critical high of $61,500 and a face value of $6.6 billion. At the time of writing, the price of bitcoin is at $61,398, approaching the critical high point before today's expiration.
This indicates that the price of bitcoin is approaching the level where most options will expire worthless. Traders could be positioning themselves to benefit from this alignment, which could lead to lower volatility and greater market stability around expiration.
Quarterly options on outstanding bitcoin and ether contracts, with a combined face value exceeding $10 billion and expiring on Deribit, expire today. This major event accounts for over 40% of Deribit's current open interest.
According to Luuk Strijers, CEO of Deribit, Friday's big quarterly expiry could be influenced by a "quadruple witch" and the associated volatility in US markets. The quadruple witch occurs four times a year, towards the end of each quarter, when index futures, index options, options and futures contracts expire simultaneously.
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