Bitcoin Faces Test as $10.9B Options Expire

Bitcoin Options Expiry Looms, Potentially Impacting Spot Market

Approximately 135,000 Bitcoin options contracts, valued at $10.9 billion, are scheduled to expire on the Deribit exchange at 8 AM UTC today, October 30. Given the significant size of this expiry and its timing at the month’s end, it is plausible that it could influence volatility in the spot market.

Data from the X account “unfolded” indicates a put/call ratio of 0.53, suggesting that call options are nearly twice as prevalent as put options. The “max pain” price, representing the point at which most option buyers would incur losses while sellers profit, is set at $78,000, a level closely mirroring Bitcoin’s current spot price.

Earlier this week, Bitcoin reached a high of $81,700 following the Federal Reserve’s decision to maintain interest rates after September’s increase. However, the cryptocurrency later retreated to around $80,500. At the time of reporting, Bitcoin was trading just above $78,000, according to CoinGecko. This follows a prior dip to the $76,000 level, attributed to a $6.3 billion hack on Binance. Over the past month, Bitcoin has declined by 6%, placing it approximately 38% below its all-time high of over $126,000.

A chart shared by unfolded depicted the largest call positions concentrated at strike prices of $95,000 and $100,000, significantly above the current market. Conversely, put options were clustered at lower levels, with a peak between $70,000 and $75,000.

Ethereum Options Also Set to Expire

In addition to the substantial Bitcoin options expiry, Ethereum contracts with a notional value of $776 million are also due to expire. These Ethereum options have a max pain price of $2,500 and a put/call ratio of 0.77. Cumulatively, the total notional value of expiring cryptocurrency options reaches $11.67 billion, marking this as a considerable market event.

Ethereum, the second-largest cryptocurrency by market capitalization, was trading near $2,200, a level below its max pain price. CoinGecko data shows this price represents a 16% decrease from 30 days ago and a 43% drop over the past year.

Trader Sentiment and Future Outlook

Market observer Dennis Liu commented on the situation, noting a stronger trend of put buying than call buying for the subsequent options expiry on November 6, which coincides with midterm week. He observed that downside protection is currently more expensive than comparable upside bets, suggesting that some traders are actively hedging against potential losses.

Liu projected the expected trading range for today’s expiry to be between $77,600 and $82,400, with the range for the November 6 expiry widening to $75,200 to $85,100. Looking further ahead, he indicated a more bullish sentiment, with call options outnumbering put options by 1.7 to 1 for November 27 and 1.5 to 1 for December 25.

“I’m not expecting a weekly close below 75K,” Liu stated. “If we get a midterm drawdown, that’s the downside risk I’m willing to swallow. If there’s no drawdown at all, maybe we stop at 78K and just go up.”