What to Anticipate as Bitcoin Prepares for $5.8 Billion Options Expiration
Bitcoin (BTC) is preparing for a crucial moment as $5.82 billion worth of crypto options are set to expire tomorrow. As of Thursday’s European trading hours, Bitcoin is maintaining a position above $40,000, with $3.75 billion worth of BTC options and $2.07 billion worth of ETH options in focus.
This development could have a significant impact. Let’s delve into it.
All eyes are on Deribit, the world’s largest crypto options exchange, where Friday’s upcoming expiry involves a substantial $3.75 billion in BTC options and $2.07 billion in ETH options. Impressively, this accounts for over 85% of global activity.
Leading up to this critical moment, there is a noticeable market rebound from the initial effects of the ETF introduction and GBTC unwind. Despite the challenges, traders are strategically shifting from January expiry contracts to February, indicating a calculated response to market conditions.
Currently, Bitcoin is resilient at $39,870, demonstrating stability ahead of the release of U.S. fourth-quarter gross domestic product (GDP) data and a significant $5.8 billion crypto options expiry on Deribit.
In contrast, the dollar index, which measures the value of the greenback against major fiat currencies, remains steady at around 103.70. Traders are closely monitoring the highly-anticipated U.S. fourth-quarter GDP data, expected to reveal a 2% seasonally adjusted annualized pace, down from 4.9% in Q3.
Market sentiment is uncertain as traders reassess the likelihood of early Fed rate cuts amid the ongoing inflationary crisis. Notably, Fed funds futures currently indicate a 50% chance of a Fed rate cut in March, a significant shift from the 80% probability observed just a month ago.
Highlighting critical levels, the maximum pain point for Bitcoin’s January expiry options is identified at $41,000, while Ether’s is at $2,300. This represents the point at which options buyers face the highest potential losses on expiry, a crucial factor for strategic decision-making by traders.
As the crypto market approaches the U.S. GDP release and the consequential options expiry, closely monitored by traders, the potential impact on both Bitcoin and Ether prices becomes increasingly evident.
We are filled with anticipation. Are you?