How will the crypto market behave when $4.2 billion in Bitcoin options expire today?

Approximately 62,600 Bitcoin options contracts expire on Friday, October 25th, with a notional amount of approximately $4.26 billion.

Today's option expiration is a month-end event, so it is much larger than a typical weekly expiration. Additionally, the spot market has fallen since Monday's high, but can this trend be reversed?

Bitcoin options expiration date

The put/call ratio for large Bitcoin options contracts this week is 0.66, meaning there are significantly more long (call) contracts expiring than short (put).

Additionally, Open Interest (OI), the amount or number of open option contracts that have not yet expired, remains high at the $70,000 strike price, with the amount exceeding $1 billion, according to Deribit. It is said that there is

Additionally, the OI at a strike price of $80,000 was a whopping $1.2 billion, suggesting that derivatives bulls are confident the market momentum will continue.

Additionally, Bitcoin futures OI hit an all-time high earlier this week, topping $40 billion, according to Coinglass. However, some of this leverage was flushed out in this week's market pullback.

Cryptocurrency derivatives provider Greek Live commented that BTC’s dominance in the options market has returned to 2021 levels. It added that this is “directly related to the weakness in ETH, as options market indicators are now almost exclusively based on BTC data.”

Deribit noted in its weekly crypto derivatives report that the upcoming US presidential election still has a significant impact on market trends.

“The implied volatility of 14-day tenor options for both ETH and BTC has increased and is now approaching levels seen in long-term options.”

Term options allow contract purchasers to choose the maturity date that best suits their needs and can be tailored to suit risk management.

In addition to current Bitcoin options, there are 403,000 expiring Ethereum options with a put/call ratio of 0.97 and a notional value of $1 billion. This leaves Friday's cryptocurrency options expiring this week at approximately $5.3 billion.

Virtual currency market outlook

The cryptocurrency market is ending a week of declines with a slight recovery, with total capital reaching $2.42 trillion in early trading in Asia on Friday morning.

Bitcoin has recouped almost all of its losses, hitting an intraday high of $68,821 late Thursday before falling back below $68,000. The asset is up 13% over the past two weeks.

The same cannot be said for Ethereum, which remains in the doldrums, declining slightly on the day and hovering around the $2,500 level.