🚨 Crypto Chaos: $10B Expiry Shakes Markets! 😱

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Ah, the grand spectacle of 80,000 Bitcoin options contracts expiring on this fine Friday, January 30th, with a notional value of roughly $8.36 billion. A sum so vast, it could make even the most stoic of bankers weep into their morning coffee. Yet, the spot markets, those unflappable titans, remain as flat as a pancake left out in the rain. Truly, a marvel of modern finance.

This week’s expiry event, being the end of the month, is a particularly large one. But, as is often the case with these crypto derivatives expiry events, they rarely influence the spot markets. It’s as if the markets are saying, “Oh, you’re expiring? How quaint. Do carry on.”

Bitcoin Options Expiry

This week’s batch of Bitcoin options contracts boasts a put/call ratio of 0.68, which means there are more call (long) contracts expiring than puts (shorts). A veritable feast for the bulls, one might say. And the open interest (OI), that is, the value or number of BTC options contracts yet to expire, is highest at the $120,000 strike price, a staggering $2.4 billion, according to Deribit. There’s also around $1.65 billion in OI at the $110,000 strike price, as derivatives traders continue to speculate that BTC prices will rise from current levels. Ah, the eternal optimism of the crypto trader!

Earlier this week, crypto derivatives provider Greeks Live declared that the “longer-term outlook remains constructive with expectations of continued upward momentum.” Meanwhile, Deribit reported that Bitcoin’s brief drop below $100,000 this week caused some changes in the derivatives market. Short-term traders were buying more put options than usual, but longer-term traders remained optimistic, favoring call options. It’s as if the market is a grand theater, with each trader playing their part in this never-ending drama.

And let us not forget the 600,000 Ethereum contracts also expiring today, with a notional value of $1.95 billion and a put/call ratio of 0.43. This brings Friday’s combined crypto options expiry notional value to around $10.3 billion. A sum so large, it could make even the most jaded of Wall Street veterans raise an eyebrow.

Crypto Market Outlook

Total market capitalization has fallen just over 1% on the day to $3.68 trillion, where it was at the same time last week. Bitcoin reached $106,000 in an intraday high on Thursday but started to retreat during the Friday morning Asian trading session, falling to $104,300 at the time of writing. It has recovered from a Monday dip into the five-figure territory but failed to gain further momentum this week. Ethereum remains weak, having failed to reach $3,300 and trading at just over $3,200 at the time of writing. The altcoins were generally mixed with minor gains and losses on Friday morning. Stellar (XLM), Sui (SUI), and Litecoin (LTC) were doing a little better than the rest. Analysts have observed that February is usually much better for crypto price action than January, so things could be about to heat up. Or, as the saying goes, “The market giveth, and the market taketh away.”

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2025-01-31 09:12