Around 25,000 Bitcoin options contracts are set to expire on Friday, January 16th, representing a notional value of approximately $2.4 billion. This expiry event is slightly larger than the previous week's, but with derivatives trading remaining subdued, it is unlikely to have a significant impact on spot markets.
Crypto markets have experienced a notable increase, gaining around $130 billion since the beginning of the week. Major cryptocurrencies have reached two-month highs, even amidst the postponement of the Senate markup for market structure legislation in the United States.
Bitcoin Options Expiry Details
The current tranche of Bitcoin options contracts features a put/call ratio of 1.2. This indicates that the number of expiring call options (long positions) is slightly lower than the number of put options (short positions). Coinglass reports the maximum pain point for these options is around $92,000, which is quite close to the current spot prices. Consequently, a substantial number of these contracts are expected to expire in the money.
Open interest (OI), representing the value or number of Bitcoin options contracts yet to expire, remains highest at the $100,000 strike price. Deribit alone holds $2.2 billion in OI at this level. Additionally, there is approximately $1.2 billion in OI at the $75,000 strike price, reflecting ongoing short positions on the asset.
Across all exchanges, the total Bitcoin options OI continues to climb, currently standing at $39 billion.
Despite Bitcoin's recent resurgence to $97,000, futures trading volume has not seen a substantial increase. Furthermore, the implied volatility (IV) for major expiries has not rebounded significantly, according to data reported by Greeks Live this week.
"The derivatives market has not yet entered a structurally bullish phase. The current trading structure appears more like a reactive response to the sudden surge, with the long-term outlook still not shifting toward a bull market."
In addition to the Bitcoin options expiring today, approximately 131,000 Ethereum contracts are also coming due. These contracts have a notional value of $436 million, with a maximum pain point at $3,200 and a put/call ratio of 1. The total Ethereum options OI across all exchanges is around $9 billion.
Cumulatively, the total notional value of crypto options expiring this week amounts to approximately $2.83 billion.
Spot Market Outlook
The total cryptocurrency market capitalization has seen a slight dip over the past 24 hours, now standing at $3.32 trillion. However, this figure remains up by 4% compared to the same time last week.
Bitcoin reached the $97,000 mark twice on Thursday. However, strong resistance prevented further upward movement, leading to a retreat to $95,670 during the Friday morning Asian trading session. Ethereum experienced a similar pattern, touching just below $3,400 before also retreating to trade at slightly over $3,300 at the time of writing.
The majority of altcoins were trading in the red, with the exception of Tron, which saw a 2.4% gain. XRP, Dogecoin, Cardano, and Monero were among those experiencing larger losses.