This Friday, an important event will occur in the cryptocurrency market and options worth approximately $9.4 billion will expire on the Deribit derivatives exchange. The majority of these options are Bitcoin contracts with a nominal value of $6.35 billion.
The put-call ratio, an important indicator of market sentiment, is at a high level of 0.68 ahead of Friday's month-end expiry. This represents an increase in the number of trading transactions compared to the previous week and indicates a cautious outlook among investors.
In addition to Bitcoin, Ethereum options with a face value of $3.08 billion will also expire. However, the case for ETH options reveals a significantly lower put-call ratio compared to the Bitcoin rate. The put-call ratio for ETH contracts is lower than 0.49 before expiration on Friday. A put-call option ratio below one indicates that call volume exceeds put volume and indicates bullish sentiment in the market.
According to data from Deribit, the largest open position before the year-end expiration consists of call options with a strike price of $100,000. This bullish trade indicates that derivatives players expect Bitcoin's value to exceed this price by December.
QCP Capital analysts commented on the activity in Bitcoin options at the end of the year. “We saw a flurry of BTC options activity around year-end expiration as investors began positioning for a post-halving resumption of the uptrend and an exit from this two-month-long consolidation,” analysts said.
*This is not investment advice.