Massive Bitcoin Options Set To Expire

The bitcoin market enters a crucial day with the expiration of $16.5 billion in options, a record that could shape its short-term trajectory. While $90,000 seemed within reach, an unexpected pullback has weakened bullish positions, offering sellers a strategic opportunity. In this battle between buyers and sellers, the outcome will depend on price movements in the coming hours, with a potential impact far beyond this single deadline. The market is holding its breath, ready to flip in one direction or the other.

A Bitcoin Options Expiration Under High Tension

With an exceptional amount of $16.5 billion in Bitcoin options set to expire, investors find themselves in a complex situation. Indeed, the BTC options market is dominated by Deribit (74% market share), followed by the Chicago Mercantile Exchange (CME) and Binance, each with a more limited influence.

Open positions are distributed as follows:

• $10.5 billion in call options, betting on a rise in bitcoin ;
• $6 billion in put options, betting on a drop in price ;
• $7.6 billion of call options are positioned above $92,000, meaning a 6.4 % rebound is needed for them to become profitable.

If bitcoin does not surpass this threshold, a majority of these contracts will become worthless. Conversely, short sellers can take advantage of this pressure to strengthen their position.

To maximize their gains, bullish investors must push bitcoin beyond $90,000. At this level, they would benefit from a significant advantage, with a favorable gap of $3 billion between call and put options.

However, conversely, bearish traders seek to drive the price below $84,000, which would strengthen the value of the put options at stake.

The scenarios considered are clear:

• If bitcoin oscillates between $85,000 and $88,000, the advantage slightly favors bullish investors ;
• Between $88,000 and $90,000, the gap widens to $1.6 billion ;
• Above $90,000, the bulls would clearly regain the upper hand, with more than $3 billion in potential gains.

The behavior of traders in the coming hours will thus be decisive for the short-term direction of bitcoin.

A Market Influenced by External Factors

The price of bitcoin remains heavily influenced by global economic trends. Indeed, the persistent correlation with the S&P 500 (above 70 % since early March) illustrates how much crypto is still perceived as a risky asset. The uncertainty surrounding monetary policies and international economic tensions weighs on investor morale.

Some, however, hope for a gradual decoupling, driven by increasing institutional adoption. GameStop, Rumble, Metaplanet, and Semler Scientific have invested heavily in bitcoin, reinforcing its position as an alternative store of value. This phenomenon could, in the long term, change the balance of forces in the market, but the short-term impact remains uncertain.

The expiration of options today could serve as a catalyst for a more pronounced price movement in the coming days. If bitcoin surpasses $90,000, it could trigger a bullish momentum for April, especially in the event of a resurgence of inflows into spot Bitcoin ETFs. Conversely, a break below $84,000 would reinforce bearish positions and could exacerbate the correction.

Luc Jose A.

Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.