The cryptocurrency market is closely monitoring the expiry of about 33,000 Bitcoin options contracts worth $1.4 billion, set to occur on December 8. This substantial options expiry, with a put/call ratio of 0.84, indicates slightly more call sellers than put sellers. The total open interest in Bitcoin options is nearing a record $16 billion, as reported by Deribit. The max pain price for this expiry is around $36,000.
This event is driving a notable increase in short-term options positions. Traders bullish on the ETF are inclined to trade January options. Two significant strike prices have emerged, with over 20,000 calls each for $40,000 and $50,000. Market analysts, such as those from the Kobeissi Letter, suggest that Bitcoin could hit $50,000 by January. The expectations surrounding the approval of Bitcoin ETFs may already be factored into the market, leading to speculation about a potential massive sell-the-news event. Historical trends show that when Bitcoin experiences a run, it tends to sustain the momentum. However, the market remains cautious, considering the potential impact of such a large options expiry and the mixed signals it sends to investors.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.