As Bitcoin (BTC) and Ether (ETH) options contracts worth billions approach expiration this Friday, the crypto market could experience heightened volatility. Set to expire on November 29, 2024, at 08:00 UTC, these options contracts—totaling $9.4 billion for Bitcoin and $1.3 billion for Ethereum—could spark significant price fluctuations, particularly after the U.S. Thanksgiving holiday.
Of the $9.4 billion in Bitcoin options expiring, approximately 45% ($4.2 billion) is “in the money,” with a dominant portion being call options. This means many Bitcoin holders are positioned to profit, potentially increasing market movements as investors adjust their positions. Similar surges in volatility were seen last month, with Bitcoin experiencing a 3% drop on the last Friday of October as $4 billion in options expired.
In addition, out-of-the-money options for Bitcoin are mostly put contracts, accounting for a $5.2 billion notional value, which suggests that many traders have used these options as hedges rather than outright bearish bets. This hedging activity, particularly in the $70,000 to $82,000 range, is expected to lead to increased buying activity from market makers, which could drive Bitcoin’s price further toward the psychological $100,000 level.
Experts suggest that Bitcoin’s significant price deviation from its max pain price—currently around $78,000—could lead to a rally, with market makers possibly buying up Bitcoin to hedge their positions as expiration nears.
With this backdrop, Bitcoin’s price could see volatility spikes, offering opportunities for traders while also highlighting risks in the lead-up to options expiry.
