The cryptocurrency market is observing a significant event as $1.1 billion worth of Bitcoin options contracts are set to expire. This expiry, occurring on December 22, represents a notable volume, with a put/call ratio of 0.70 indicating that more long (call) positions are expiring than short (put) ones. This event is slightly smaller in scale compared to the previous week’s expiry and is dwarfed by an even larger end-of-year expiry due next Friday.
The expiring Bitcoin options contracts show considerable interest at strike prices of $40,000 and $45,000. Deribit reports that around 22,400 calls are awaiting the $50,000 mark. This situation is indicative of high market sentiment, with large investors ("whales") adding to their bearish positions. Traders are thus advised to remain cautious of potential downside risks.
In addition to Bitcoin, approximately 217,000 Ethereum options contracts are also set to expire, holding a notional value of around $491 million. Despite the significance of these expiries, they are unlikely to have a major impact on the spot markets. The total market capitalization has risen to $1.74 trillion, its highest since May 2022. Bitcoin itself has shown a positive trend, gaining 1.4% and returning to resistance at $44,135 at the time of writing, up 3.6% from the previous week.
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.