$9.4B Worth Bitcoin Options Expiry: Will the Price Jump?
Bitcoin and Ethereum are about to face a big event. On November 29, Bitcoin options worth $9.4 billion and Ethereum options worth $1.3 billion are about to expire. This could lead to significant volatility in the cryptocurrency market, especially after the U.S. Thanksgiving holiday. So what does this all mean? Let’s break it down.
What’s the danger?
Here’s the thing: Nearly half of all Bitcoin options (approximately $4.2 billion) are “in-the-money” (ITM) options. This means that many traders can potentially make huge profits. What’s the gain? Most of these are call options, meaning people are betting that the price of Bitcoin will continue to climb. Therefore, we may see some significant price action before November 29th. But don’t be surprised if things get rocky. Similar expirations have caused Bitcoin prices to drop before (down approximately 3% in October), but this time may be different.
What happens when a big option expires?
With so many ITM calls, the Bitcoin market can become quite volatile. Traders may wish to lock in profits, which may cause price fluctuations. But what about the other side of the transaction? There are many puts priced around $70,000. However, experts don’t think that’s where things are going. Because of the “maximum pain” theory, they focus more on the range between $70,000 and $82,000.
What’s next for Bitcoin?
Now, let’s talk about those out-of-the-money (OTM) options – they’re worth about $5.2 billion. Most of these are put options, but rather than bets that Bitcoin will fall, they are more like insurance against an economic downturn. Still, the fact that Bitcoin prices are comfortably above the “maximum pain” level means market makers may need to buy more Bitcoin to cover their positions. If they do, it could push the price higher, closer to $100,000.
What’s coming?
With all of these options expiration drama unfolding, Bitcoin’s price is likely to see some wild swings. Will market makers help push Bitcoin to new heights, or will profit-taking drive Bitcoin lower? It’s a waiting game, the big day is coming.
