How Will Markets React to $1B Bitcoin Options Expiring Tomorrow

Approximately 17,400 Bitcoin options contracts are due for expiry on Friday, Oct. 4. These contracts have a notional value of around $1 billion.

Today’s options expiry is much smaller than last week’s mammoth end-of-the-month and end-of-the-quarter event, so it is unlikely to impact spot markets, which have been retreating this week.

Bitcoin Options Expiry

This week’s tranche of Bitcoin options contracts has a put/call ratio of 0.75. This means that slightly more long (call) contracts are expiring than shorts (puts).

Additionally, open interest (OI), or the value of open options contracts yet to expire, is still high at the strike price of $70,000 with $841 million.

OI at the $80,000 and $90,000 strike prices has fallen. However, according to Deribit, there is still $968 million at the $100,000 strike price.

Crypto derivatives provider Greeks Live shared its outlook for markets earlier this week, stating that “crypto markets are entering a shakeout” before adding:

“Quarterly delivery is over, major maturity IVs (implied volatility) are at lower levels and there is still a lot of downward pressure this week, historically October is generally a better month and now is a good opportunity to buy.”

Bitcoin Investment Essentials, A Sneak Peek at This Week’s Biggest Events (9/30-10/6)

The most important macro data this week is Friday’s unemployment rate and non-farm payrolls data, and now the windy A-share market compared to the U.S. stock market is obviously much less…

— Greeks.live (@GreeksLive) October 1, 2024

In addition to today’s Bitcoin options, there are around 119,000 Ethereum options about to expire, with a notional value of $282 million and a put/call ratio of 0.68. This brings the total expiry event to around $1.3 billion.

Crypto Market Outlook

Crypto markets declined another 2% on the day, with total capitalization dropping to $2.21 trillion, its lowest level since mid-September.

Moreover, markets have dumped $200 billion since the beginning of this month, dispelling the hype of an “Uptober” to follow “Slumptember.”

Bitcoin hit an intraday low of $59,950 in late trading on Thursday but recovered to reclaim $61,000 during the Friday morning Asian trading session. However, that also looked precarious, with the asset falling back again at the time of writing.

Ethereum prices mirrored the action, dropping close to $2,300 before a marginal recovery to $2,370 at the time of writing. ETH has dumped 10% over the past seven days as the wave of FUD returns.

Most altcoins were in the red this Friday morning, as they have been for most of this week.