Will Markets Fall Further When $4.8B Crypto Options Expire Today?

Around 33,700 Bitcoin options contracts will expire on Friday, August 22, and they have a notional value of roughly $3.8 billion.

This expiry event is smaller than last week’s and unlikely to influence spot markets, which have started to move higher after a mid-week correction.

All eyes are on the Federal Reserve Chair speaking at Jackson Hole today, as a hawkish stance could induce more volatility, and markets are already starting to react.

Bitcoin Options Expiry

This week’s batch of Bitcoin options contracts has a put/call ratio of 1.32, meaning that there are quite a few more short contracts expiring than longs, as short sellers increase following the correction. There is a max pain point of $118,000 where most losses will be made on expiry.

Open interest (OI), or the value or number of BTC options contracts yet to expire, is highest at $140,000, which has surged to almost $3 billion at this strike price on Deribit. There is also around $2 billion OI at $120,000 and $130,000 strike prices as the bull speculators load up on contracts, but $110,000 is still a popular strike price for shorts with $1.7 billion in OI.

Additionally, total Bitcoin futures OI currently stands at $81 billion, which has fallen from recent record highs, according to CoinGlass.

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Crypto derivatives provider Greeks Live said on Thursday, “With the Fed’s Jackson Hole meeting approaching, opinions in the options market are divided.”

“Short-term implied volatility declined, indicating that institutional investors are not very optimistic that this meeting will bring about significant volatility.”

In addition to today’s tranche of Bitcoin options, there are around 220,000 Ethereum contracts that are also expiring, with a notional value of $947 million, a max pain of $4,250, and a put/call ratio of 0.82. This brings Friday’s combined crypto options expiry notional value to around $4.8 billion.

Crypto Market Outlook

The market recovery was very short-lived, and the sell-off has resumed this Friday morning in Asia. Total capitalization is down 2% to $3.89 trillion, and the altcoins are leading losses.

Bitcoin has fallen back to support at $112,000, but again did not break below this key level and recovered back to $113,000 at the time of writing. However, sentiment has waned, and further losses look more likely than a big pump.

Ethereum has mirrored its big brother, dropping 1.7% in a fall back to the $4,200 level, which is holding as support, for now.

The altcoins were in worse shape with heavier losses for Binance Coin, Solana, Chainlink, and Hyperliquid.

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