Ahead of the massive $20 billion expiration in Bitcoin and Ethereum options, volatility and altcoin movement are expected in the market.
Singapore-based QCP Capital has highlighted a major move this Friday involving the expiration of approximately $20 billion worth of Bitcoin and Ethereum options.
This amount is almost half of the total open interest on Deribit, the company said. It also said that if the spot price continues to fluctuate at current levels, option sellers are likely to bring forward their short positions.
This process, called “Roll,” means that investors carry the same position to a later date instead of expiring their options at maturity. This method allows investors to keep their positions active if they still trust market forecasts.
High volatility is known to provide a profitable environment for option buyers. Higher volatility increases the probability that options will be “in the money” (profitable) before expiration, allowing buyers to make a profit.
Stating that Bitcoin continues to struggle below $ 100,000, QCP said that this situation could lead to alternative cryptocurrencies (altcoins) taking action.
The company recalled that a similar trend was seen last month, and the ETH/BTC rate jumped from the 0.032 support level at that time. It said that there was a revival in the altcoin markets after this move.
Stay tuned