Bitcoin is set for its largest monthly options expiration in 2024, with total exposure reaching $13.6 billion.
Less than 2% of BTC puts targeting $100,000 or more
This event presents a pivotal opportunity for bulls to push Bitcoin (BTC) price above $100,000, making it important to assess the impact of call (buy) and put (sell) options expiring on November 29. do.
The S&P 500 has struggled to maintain levels above 6,000 over the past three weeks, indicating growing investor interest. This change in sentiment is reflected in the US five-year Treasury yield, which has fallen from 4.35% on November 15 to 4.12% today.
Investors increasingly prioritize the relative safety of government bonds, even if their yields are low.
S&P 500 futures (blue) and 5-year US Treasury yield (magenta). Source: TradingView/Cointelegraph
Periods of macroeconomic uncertainty, often driven by fears of an economic slowdown, typically trigger a flight into quality assets, forcing investors to exit riskier assets.
Nonetheless, Bitcoin’s 5% bounce from its low of $90,775 on November 26 suggests that confidence remains strong, amid a 34% rise over the past 30 days.
According to Yahoo Finance, economists at Pantheon Macroeconomics wrote in a Nov. 27 research note that U.S. personal consumption expenditures (PCE) inflation could exceed 3% if President-elect Donald Trump implements import tariffs. He said it could rise. Separately, Barclays analysts said:
“Tariffs of this nature, temporary and uncertain, create a natural incentive to delay investment.”
To put things in perspective, on November 29, Bitcoin call options had a total notional value of $7.4 billion on Deribit, CME, OKX, Binance, and Bybit, compared to $6.2 billion in put option open interest. exceeded by 19%. . Since cryptocurrency traders often tend to be bullish, these differences are narrower than the general trend.
Deribit Bitcoin November 29 Options Open Interest, BTC. Source: Deribit
Notably, only 20% of call options have strike prices above $100,000, corresponding to a notional value of $4.25 billion at expiration in November.
relevant: Buying Bitcoin in 2013 was ‘like buying gold in 1000 BC’ — Pantera CEO
In contrast, less than 2% of put options target more than $100,000, effectively rendering most options worthless and reducing their notional value to about $80 million.
Bitcoin call (buy) options are advantageous for uptrends.
Below are the four most likely scenarios for the Deribit exchange based on current price trends. The availability of call and put options for expiration on November 28 will depend on the Bitcoin settlement price at 8:00 AM UTC.
This analysis assumes that call options are primarily used for bullish positions, while put options reflect a neutral to bearish strategy. However, it is important to note that this is a simplified approach and does not describe more advanced or complex trading strategies.
- Between $86,000 and $90,000: The net result favors call (buy) options by $1.65 billion.
- Between $90,000 and $94,000: The net result favors call (buy) options by $2.6 billion.
- Between $94,000 and $98,000: The net result favors call (buy) options by $3.55 billion.
- Between $98,000 and $102,000: The net result favors call (buy) options by $4.58 billion.
Bears therefore face significant pressure to drive the price of Bitcoin below $90,000 before the options expire in November to prevent the call option from becoming dominant.
However, Bitcoin’s resilience even amid inflation concerns suggests the price could reach $100,000 or more soon after these BTC options expire.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.