Will Bitcoin Keep Falling After $1.4B BTC Options Expire?

On Friday, August 16, around 24,300 Bitcoin options contracts will expire, with a notional value of around $1.4 billion.

Today’s options expiry event is smaller than last week’s, so its impact on spot markets is likely to be limited. The much larger month-end expiry event currently has a notional value of $3.2 billion.

Bitcoin Options Expiry

This week’s tranche of Bitcoin options contracts has a put/call ratio of 0.82, which means that longs and shorts are more closely aligned with slightly more long (call) contracts expiring than shorts (puts).

The max pain, or point at which most losses will be made, is at $59,500, which is just above current spot prices following today’s declines.

There is still a lot of open interest (OI), or contracts yet to expire, between $65,000 and $75,000, with nearly $700 million at the latter level. There is also more than $900 million in OI at the $100,000 strike price, according to Deribit.

Crypto derivatives provider Greeks Live commented that with the release of US PPI and CPI reports, “the market’s volatility expectations fell significantly, which in turn drove significant declines in IVs [implied volatility] across all major maturities.”

It added that the decline in crypto derivatives IV could lead to a more stable period.

“The recent options market is gradually lowering expectations of future volatility, and the market will gradually enter a stable period.”

Aug. 16 Options Data
24,000 BTC options are about to expire with a Put Call Ratio of 0.83, a Maxpain point of $59,500 and a notional value of $1.4 billion.
184,000 ETH options are about to expire with a Put Call Ratio of 0.80, Maxpain point of $2,650 and notional value of $470… pic.twitter.com/70UvUSo09W

— Greeks.live (@GreeksLive) August 16, 2024

In addition to the above, 184,000 Ethereum options, with a notional value of $470 million, are about to expire.

These have a put/call ratio of 0.80 and a max pain point of $2,650, which is pretty close to market prices.

Crypto Market Outlook

Markets have declined by 2.2% over the past 12 hours, with total capitalization dipping to $2.15 trillion, its lowest point since last week’s recovery.

Bitcoin tanked to an intraday low of $56,650 before recovering to reclaim $58,000 during the Friday morning Asian trading session. Analysts and the liquidity heatmap have highlighted this level as crucial support.

Ethereum continues to weaken in a fall to $2,532 before recovering to reclaim $2,600 over the past few hours.

As usual, the altcoins are a sea of red and continue to wallow in bear market malaise.