Around 20,000 Bitcoin options contracts are due for expiry on Friday, Sept. 20. These crypto derivatives have a notional value of around $1.26 billion.
Today’s options expiry is very similar in size to last week’s expiry event, which did not have much of an impact on crypto spot markets.
Next week’s expiry is an end-of-month and end-of-quarter event with more than $5.3 billion worth of Bitcoin contracts expiring.
Bitcoin Options Expiry
This week’s batch of Bitcoin options contracts has a put/call ratio of 0.85, meaning that there are slightly more long (call) contracts expiring than shorts (puts), but they are quite closely matched.
Open interest, or the value or number of open options contracts yet to expire, is still high at strike prices of $70,000 and $75,000, with more than $700 million at both levels.
Moreover, there is an additional $848 million in OI at $90,000 and over a billion dollars on OI at the $100,000 strike price, according to Deribit.
Bitcoin OI by expiry. Source: Deribit
Crypto derivatives provider Greeks Live commented on this week’s highly-anticipated Federal Reserve rate cut and market reaction, stating that it drove crypto markets higher while US stocks “underperformed.” Regarding crypto options, it added:
“Implied volatility declined significantly across all major maturities, with ultra-short-term IVs falling by over 25%, as short-term short-selling expectations by large investors fell short.”
Implied volatility is a measure of future expected fluctuations derived from expiring derivatives contracts. Greeks added that there will be two more interest rate Fed meetings on Nov. 8 and Dec. 19, “and the market expects a cumulative 100 bps rate cut.”
In addition to this week’s Bitcoin options, there are around 124,000 Ethereum options expiring with a notional value of $303 million and a put/call ratio of 0.66.
The Bitcoin Fear and Greed Index has returned to neutral with a reading of 54 with market sentiment improving slightly over last week.
Bitcoin Fear and Greed Index is 54 – Neutral Current price: $62,941 pic.twitter.com/vxv68pdG9v
— Bitcoin Fear and Greed Index (@BitcoinFear) September 20, 2024
Crypto Market Outlook
Crypto markets are ending the week up $120 billion, or around 5.7%, in total market capitalization, which was $2.27 trillion at the time of writing.
Bitcoin reached its highest price for almost a month on Thursday briefly exceeding $64,000 before falling back during the Friday morning Asian trading session. The asset was changing hands for $63,900 at the time of writing following a daily gain of 2.5%.
Ethereum peaked at an intraday high of $2,550 before returning to the $2,530 level, having posted a gain of 5.5% on the day.
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