Crypto on Edge: Will Huge $8.3B Bitcoin Options Expiry Trigger Another Dump?

Around 91,000 Bitcoin options contracts will expire on Friday, Jan. 30, with a notional value of roughly $8.3 billion. This event is much larger than the rest this month because it is the last one for January.

Crypto markets have lost around $215 billion since the start of the week, as the Federal Reserve kept US interest rates steady at 3.5% to 3.75%, still much higher than its 2% target. Geopolitical tensions in the Middle East also reignited, sparking further fears.

Bitcoin Options Expiry

This week’s big batch of Bitcoin options contracts has a put/call ratio of 0.54, meaning that there are more expiring calls (longs) than puts (shorts). Max pain is around $90,000, according to Coinglass, which is above current spot prices, so many will be out of the money on expiry.

Open interest (OI), or the value or number of Bitcoin options contracts yet to expire, remains highest at $100,000, which has $1.9 billion at this strike price on Deribit. There remains around over $1 billion in OI at $75,000, $80,000 and $85,000 as bearish bets mount.

Total BTC options OI across all exchanges has been climbing since the beginning of the year and is at $58 billion.

“Expiry could amplify moves around key levels, especially around the pain zones,” said Deribit, and that appears to be happening as spot markets tank.

Read Original