Bitcoin Options Contracts Approaching Expiration
Around 16,500 Bitcoin options contracts are slated to reach their expiry date on Friday, February 21st. The aggregate value of these contracts is estimated to be approximately $1.6 billion. Compared to the previous week’s events, this week’s expirations are relatively smaller in scale, leading market observers to anticipate minimal impact on the spot market, which has largely traded within a narrow range throughout the week.
Analyzing the Bitcoin Options Expiry
The current set of Bitcoin options exhibits a put/call ratio of 0.75, suggesting a slight prevalence of expiring call (long) contracts over put (short) ones. Data from Deribit indicates that the strike price of $120,000 holds the highest concentration of open interest, with a notional value of approximately $1.8 billion. Furthermore, a substantial $1.2 billion of open interest is observed at the $110,000 strike price, reflecting increasing optimism among derivatives traders regarding Bitcoin’s long-term price prospects.
Earlier this week, a crypto derivatives analytics firm noted a “cautiously bearish” market sentiment, citing low volatility as a source of frustration for many traders. The firm suggested that upcoming options contracts, priced with roughly 40% volatility, may indicate potential market vulnerabilities, particularly given that front-month contracts had fallen below this level.
Deribit’s weekly report also emphasized a decline in strong directional sentiment within the derivatives market, aligning with recent periods of predominantly sideways price action in spot trading.
Funding rates for both Bitcoin and Ethereum remain close to zero, following a notable negative spike experienced by Ethereum earlier in the month. Despite this, Ethereum’s volatility continues to trade at a premium compared to Bitcoin’s.
In addition to Bitcoin, nearly 153,000 Ethereum contracts are also set to expire today. These Ethereum options, with a combined notional value of roughly $420 million and a put/call ratio of 0.48, bring the total notional value of crypto options expiries for the day to nearly $2 billion.
General Crypto Market Perspective
As the week draws to a close, the broader market has seen modest gains, with the total market capitalization reaching approximately $3.35 trillion. However, when considering a broader timeframe, prices remain near the lower boundary of a trading channel that has persisted for the last three months.
On Friday, Bitcoin reached an intraday peak of around $98,750 during early Asian trading hours, but subsequently encountered resistance, resulting in a slight retracement. Ethereum, conversely, has displayed more erratic behavior, briefly surging to around $2,767 before falling back to approximately $2,744. This follows a period of sideways movement since the cryptocurrency declined below $3,000 in early February.
In summary, the market maintains a cautious outlook as traders navigate between expectations of future movements and the present subdued trading conditions.
Maxwell Reed is the first editor of Cryptovista360. He loves technology and finance, which led him to crypto. With a background in computer science and journalism, he simplifies digital currency complexities with storytelling and humor. Maxwell began following crypto early, staying updated with blockchain trends. He enjoys coffee, exploring tech, and discussing finance’s future. His motto: “Stay curious and keep learning.” Enjoy the journey with us!