Will Markets React If $1.8 Billion Bitcoin Options Expire Today?

The end of another week has arrived, which means another round of Bitcoin and Ether options contracts are expiring, while the spot markets have tanked this week.

Approximately 21,700 Bitcoin options contracts expire on Friday, January 23, with a notional value of approximately $1.8 billion. This event is slightly smaller than last week’s as derivatives trading remains sluggish.

Crypto markets have lost approximately $200 billion since the beginning of the week. amid escalating trade wars, Japanese bond turmoil and US crypto regulatory delays.

Bitcoin options expire

This week’s batch of Bitcoin options contracts has a put/call ratio of 0.75, meaning there are more expiring calls (longs) than puts (shorts). According to Coinglass, the max pain is around $92,000, which is higher than current spot prices, so many will be out of money at expiration.

Open interest (OI), or the value or number of Bitcoin options contracts yet to expire, remains highest at $100,000, which at this strike price amounts to $2 billion on Deribit. About $1.1 billion in OI remains at $85,000 and $90,000 as bearish bets increase.

The total OI of BTC options across all exchanges has increased since the beginning of the year and stands at $36 billion.

“The expiration positioning is tightly clustered around keystrokes, preserving point sensitivity in the cut,” Deribit previously said add:

“Uncertainty over geopolitics and trade policy remains the macro backdrop, supporting hedging demand and keeping volume reactive.”

In addition to the current crop of Bitcoin options, there are also approximately 118,000 Ethereum contracts expiring, with a notional value of $346 million, a max pain of $3,250, and a put/call ratio of 0.86. The total ETH options OI across all exchanges is approximately $8 billion.

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This brings the total notional value of crypto options expirations to approximately $2.1 billion.

Spot Market Outlook

The total market cap is down 1% today as all the gains made so far this year have been wiped out in this red week.

Bitcoin fell to an intraday low of $88,560 before recovering to regain $89,500 at the time of writing, but it failed to reach $90,000 in the last 24 hours, suggesting the sellers are getting stronger.

Ether prices are also bearish, with a decline below $3,000 and no attempts to regain the psychological levels of the past 12 hours. It is currently trading at $2,950.

Altcoins were largely in the red, losing another 2% to 3% that day as fear and uncertainty persist.