$7.8 Billion in Bitcoin Options to Expire by Month-End š°ā³
About $7.8 billion worth of Bitcoin options is set to expire on January 31 at 08:00 UTC. Bitcoin is currently trading above the āmax painā price of $98,000, which could cause market makers to push it lower very soon.
The term āmax painā refers to the price point where options buyers suffer the most losses, while market makers gain the most. As options expiry nears, prices often gravitate towards this level, making $98,000 a key price to watch.
According to data from Deribit, roughly $6 billion of options will expire āout of the money.ā or without value. Of this, 50% are put options, which give holders the right to sell Bitcoin at a price. Such positions were probably used for hedging or to bet against Bitcoin, particularly with recent market volatility.
Luuk Strijers, CEO of Deribit, said, āThe max pain level for this expiry stands at $98k, with significant market dynamics expected to influence price movements in the near term.ā
Strijers also pointed out that the recent lifting of SAB 121, a regulation that now allows banks to hold Bitcoin, may pave the way for institutional investment. This may increase the demand for Bitcoin, which could drive its price higher. Additionally, the anticipation of the upcoming Bitcoin reserve announcement is also charging the market.
āNext week Fridayās BTC options expiry represents a notable event as approximately 74,000 contracts are expiring. Total BTC Options notional open interest is now $28 billion, of which $7.8 billion is set to expire, with approximately 22.6% in-the-money (ITM), potentially triggering delta hedging flows in the market. While DVOL is currently around 60, aligning with year-end levels,ā Strijers said.
"Disclaimer: This is for informational purposes only and not endorsed by Binance. Crypto investments are volatile and can lead to losses. Do your own research. Not financial advice."
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