Record $14B Bitcoin Options Expiry Looms as Market Looks Highly Levered-Up
Options expiry looks to stir things up in a market that appears highly leveraged to the upside, Deribit said.
1. **Summary**:
A record $14 billion Bitcoin options expiry is approaching, causing potential market volatility due to high leverage in the market. The expiry, set for Friday, represents a significant portion of the total open interest for BTC options, with potential impacts on price movements and trader positions.
2. **Key Insights**:
– The market is highly leveraged to the upside as a large number of BTC and ETH options contracts are set to expire on Deribit, representing a substantial value.
– Bitcoin’s bearish movement following the Fed meeting has increased the risk for traders with leveraged positions, potentially leading to magnified losses.
– The high put-call open interest ratio for the expiry indicates skewed leverage to the upside, with a potential for increased volatility if traders exit positions.
– The expiry event could shape market narrative heading into the new year, reflecting uncertainty and heightened volatility expectations.
– Options-based metrics point towards a lack of clarity in potential price movements as the expiration approaches, with implications for market direction.
– ETH shows a more bearish outlook relative to BTC based on options pricing, with decreased demand for bullish bets evident in implied volatility and options skew.
– End-of-year positioning suggests a moderately less bullish picture compared to previous months, especially noticeable for ETH compared to BTC.
