Will Bitcoin Options Expiry Impact Today’s Crypto Market Surge?

Approximately 20,000 Bitcoin options contracts are set to expire on Friday, September 20. The total notional value of these crypto derivatives is estimated at $1.26 billion.

This week’s options expiry is quite comparable in size to last week’s event, which had limited impact on the crypto spot markets.

Next week marks an end-of-month and end-of-quarter expiry, with more than $5.3 billion worth of Bitcoin contracts scheduled to mature.

Bitcoin Options Expiry

This week’s collection of Bitcoin options contracts features a put/call ratio of 0.85, indicating a slight majority of long (call) contracts are set to expire compared to short (put) contracts, although they are closely aligned.

Open interest, which refers to the total value or number of options contracts still active before expiry, remains substantial at strike levels of $70,000 and $75,000, each exceeding $700 million.

Additionally, there’s $848 million in open interest at the $90,000 strike and over a billion dollars in open interest at the $100,000 strike price, according to Deribit.

Crypto derivatives provider Greeks Live remarked on the anticipated Federal Reserve rate cut and its impact on the market, noting that it propelled crypto markets upward while US stocks “lagged.” They also observed concerning crypto options:

“Implied volatility has markedly decreased across all significant maturities, with ultra-short-term IVs dropping by over 25%, as large investors’ expectations for short-selling fell short.”

Implied volatility serves as a gauge of future expected price movements derived from expiring derivatives. Greeks further noted that two additional Federal Reserve meetings are planned on Nov. 8 and Dec. 19, “with the market anticipating a total of 100 bps in rate cuts.”

Alongside this week’s Bitcoin options, approximately 124,000 Ethereum options are set to expire, holding a notional value of $303 million and a put/call ratio of 0.66.

The Bitcoin Fear and Greed Index has returned to a neutral stance, currently reading 54, reflecting a slight improvement in market sentiment compared to the prior 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 concluding the week with an increase of $120 billion, or about 5.7%, in total market capitalization, bringing the value to $2.27 trillion at the time of this writing.

Bitcoin achieved its highest price in almost a month on Thursday, briefly surpassing $64,000 before retracting during Friday morning’s Asian trading. As of writing, the asset was trading around $63,900, having gained 2.5% on the day.

Meanwhile, Ethereum reached an intraday peak of $2,550 before settling back to the $2,530 mark, with a daily increase of 5.5%.