As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed numerous events that shaped the investment landscape. The upcoming Bitcoin options expiry on January 3rd, 2025, is no exception. With a notional value of $1.93 billion, this event, while less impactful than last week’s mammoth expiry, still holds significant implications for the crypto market.
The put/call ratio of 0.68 indicates a higher number of long contracts expiring compared to short ones, suggesting that derivatives traders remain bullish. This is further evidenced by the highest open interest at the $120,000 strike price, with a staggering $1.4 billion in OI. However, this optimism needs to be tempered with caution, as history has shown us that market expectations can sometimes lead to unexpected outcomes.
The continuous trading market, or perpetual swaps, is showing more optimistic signals, which could potentially indicate a bullish sentiment. Yet, I remember all too well the lessons from the recent downturn and will not be quick to jump to conclusions based solely on these signs.
In terms of Ethereum, around 205,000 contracts are expiring today with a notional value of $710 million and a put/call ratio of 0.82. The combined crypto options expiry notional value for the day stands at approximately $2.6 billion.
The recent influx of around $160 billion into the crypto markets since the beginning of the year has lifted total capitalization to $3.56 trillion. Bitcoin and Ethereum have shown promising gains, with BTC approaching the $97,000 level and ETH nearing $3,500.
As I always say, “The markets can be as unpredictable as a roller coaster ride.” Let’s see if this week will bring us another thrilling ride or a smooth sail through the waters of crypto trading. And remember, as always, never invest more than you’re willing to lose – even in the crypto market!
Around 20,000 Bitcoin options agreements are set to conclude on January 3, 2025, marking the first significant expiration date for the year.
The monetary worth is approximately $1.93 billion, yet this figure represents only a small portion compared to the enormous year-end expiration event from last week. Consequently, it’s expected that the effect on current market conditions will be relatively insignificant.
Bitcoin Options Expiry
In simpler terms, for this current week’s Bitcoin options, there are more investors who are betting on the price increase (long call contracts) compared to those who are wagering on a decrease (short put contracts). The ratio stands at 0.68, indicating a slightly greater preference for long positions over short ones.
As a seasoned trader with years of experience in the derivatives market, I have learned to closely monitor open interest (OI) as it provides valuable insights into market sentiment and trends. Based on the latest data from Deribit, it appears that a significant number of options contracts are still open at the $120,000 strike price with a whopping $1.4 billion in OI. This indicates a strong bullish sentiment among traders, as they seem to believe Bitcoin will reach or surpass this price level in the near future.
However, it’s also worth noting that there is another substantial amount of open interest at the $110,000 strike price with $1.3 billion in OI. This suggests that while traders are optimistic about Bitcoin’s price movement, they may have a slightly more conservative outlook and anticipate potential pullbacks before reaching the higher levels.
In my experience, it is crucial to keep an eye on such market indicators as open interest, as they can help in making informed trading decisions. With the current bullish sentiment among derivatives traders, I believe we could see some exciting price movements in the Bitcoin market in the coming days and weeks. However, it’s essential to remember that markets can be unpredictable, and it’s crucial to have a well-thought-out strategy and risk management plan before entering any trade.
According to Deribit’s report on January 2nd, the ongoing trading market, also known as perpetual swaps, seems to be emitting increasingly positive indicators, much like the signs observed prior to the recent decline.
In simpler terms, the Bitcoin options market is showing conflicting signals. Short-term options lean towards the possibility of higher put (selling) prices, indicating a slight increase in expected short-term price drops. However, long-term options are becoming more optimistic, suggesting a growing belief in Bitcoin’s future price rise.
It was mentioned that the closure at the end of December of a large portion of the market’s option open interest didn’t cause the explosive activity some had anticipated.
Recently, it was noted by crypto derivatives provider Greeks Live that a significant short call position worth approximately $42 million has been set on Bitcoin. This investor is wagering that the price of Bitcoin will not surpass $150,000 by March 28th. If their prediction proves accurate, they will earn around $900,000 from this bet.
Apart from the Bitcoin options maturing today, there are approximately 205,000 Ethereum contracts also ending today. Together, they represent a total worth of about $710 million and have a put/call ratio of 0.82.
This brings Friday’s combined crypto options expiry notional value to around $2.6 billion.
Crypto Market Outlook
Approximately $160 billion worth of assets has flowed into the cryptocurrency market this year up until yesterday, pushing the overall market capitalization to a staggering $3.56 trillion.
Over the past day, Bitcoin has shown a steady increase of approximately 1.7%, bringing its value close to the $97,000 mark during early Asian trading on Friday. Nevertheless, it’s currently holding within a specific range and needs to surpass the symbolic $100,000 resistance level to potentially continue its upward trend.
Currently, Ethereum, anticipated to perform strongly this quarter, has performed exceptionally well, increasing by 2% today as it edges closer to the $3,500 mark. For Ethereum to surpass resistance and achieve more growth, it must first break through the $3,600 level.
On this particular Friday, almost all altcoins showed a positive trend, typically surpassing Bitcoin when it came to daily profits.
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2025-01-03 09:53