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Will Huge $8.3B Bitcoin Options Expiry Trigger Another Dump?

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Will Huge $8.3B Bitcoin Options Expiry Trigger Another Dump?


The end of another week is here again, and it’s also the end of the month, which means a bumper batch of Bitcoin and Ether options contracts are expiring.

Around 91,000 Bitcoin options contracts will expire on Friday, Jan. 30, with a notional value of roughly $8.3 billion. This event is much larger than the rest this month because it is the last one for January.

Crypto markets have lost around $215 billion since the start of the week, as the Federal Reserve kept US interest rates steady at 3.5% to 3.75%, still much higher than its 2% target. Geopolitical tensions in the Middle East also reignited, sparking further fears.

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Bitcoin Options Expiry

This week’s big batch of Bitcoin options contracts has a put/call ratio of 0.54, meaning that there are more expiring calls (longs) than puts (shorts). Max pain is around $90,000, according to Coinglass, which is above current spot prices, so many will be out of the money on expiry.

Open interest (OI), or the value or number of Bitcoin options contracts yet to expire, remains highest at $100,000, which has $1.9 billion at this strike price on Deribit. There remains around over $1 billion in OI at $75,000, $80,000 and $85,000 as bearish bets mount.

Total BTC options OI across all exchanges has been climbing since the beginning of the year and is at $58 billion.

“Expiry could amplify moves around key levels, especially around the pain zones,” said Deribit, and that appears to be happening as spot markets tank.

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In addition to today’s batch of Bitcoin options, around 440,000 Ethereum contracts are also expiring, with a notional value of $1.3 billion, max pain at $3,100, and a put/call ratio of 0.74. Total ETH options OI across all exchanges is around $35 billion.

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This brings the total notional value of crypto options expiries to around $9.6 billion.

Spot Market Outlook

Crypto markets melted down during the Friday morning trading session in Asia, with total capitalization dropping below $3 trillion for the first time since mid-December. More concerning is that it has fallen to its lowest level since April, suggesting that a bear market is fully underway.

Bitcoin plunged through support, crashing 8% on the day in a fall to $81,300 at the time of writing, its lowest level since April. Ether prices tanked 9%, falling to around the $2,700 level, and the altcoins were a double-digit bloodbath.

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Crypto World

Aave Shutters Avara Brand and Family Crypto Wallet

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Aave Shutters Avara Brand and Family Crypto Wallet

Aave Labs says it is sunsetting its “umbrella brand” Avara in the company’s latest move to refocus on decentralized finance and simplify its branding.

Aave founder and CEO Stani Kulechov posted to X on Tuesday that Avara, a company encompassing projects including the Family crypto wallet and previously the social media platform Lens, “is no longer required as we go all in on bringing Aave to the masses.”

Kulechov said the Apple iOS-based Family crypto wallet was also being wound down as the team has “learned that onboarding millions of users requires purpose-built experiences, such as savings, rather than generic, open-ended wallet experiences.”

The move marks Aave’s latest effort to refocus on products such as its flagship lending protocol as the project handed stewardship of Lens to the Mask Network last month, with Kulechov saying Aave’s role in the protocol would be reduced to an advisory role so it can focus on DeFi.

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Source: Stani Kulechov

Kulechov said in his latest post that Aave was “now united as one team of world-class designers, engineers, and smart contract experts, aligned around a single mission: bringing DeFi to everyone.”

All future projects under Aave Labs

Avara said in a blog post that “all current and future products, including the Aave App, Aave Pro, and Aave Kit, will operate under Aave Labs” to simplify the brand.

It added that accounts linked to the Family wallets “will continue as core infrastructure within Aave Labs products,” but the iOS app would be wound down over the next year.

No new users will be onboarded to the app from April 1, and existing users can continue using the app until April 1, 2027, and will continue to have full access to their funds on Aave’s website.

Related: There is no trust in DeFi without proper risk management

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Aave is the biggest DeFi protocol with $30 billion in total value locked, nearly $9 billion more than the next largest project, the staking protocol Lido, which has $21.7 billion in value locked, according to DefiLlama.