Connect with us

Crypto World

Bitcoin Volatility Hits 100% Ahead of $2.6B Options Expiry

Published

on

Bitcoin Expiring Options

More than $2.6 billion worth of Bitcoin and Ethereum options are set to expire, a development that could reshape short-term price dynamics as traders unwind hedges and reposition.

The event comes amid elevated volatility, defensive positioning, and growing evidence that institutional participants are actively hedging downside risk.

Sponsored

Sponsored

Advertisement

Bitcoin and Ethereum Options Expiry Could Trigger Volatility as $2.6 Billion in Contracts Settle

Data from derivatives markets shows Bitcoin accounts for the bulk of the expiry, with roughly $2.2 billion in notional value tied to contracts. Ethereum represents an additional $419 million, bringing the combined total to more than $2.6 billion.

Bitcoin is currently trading near $64,686, significantly below its max pain level of $80,000, the price at which the greatest number of options would expire worthless.

Total open interest stands at 33,984 contracts, including 21,396 calls and 12,588 puts, resulting in a put-to-call ratio of 0.59.

Bitcoin Expiring Options
Bitcoin Expiring Options. Source: Deribit

Ethereum, meanwhile, is trading around $1,905, also below its $2,400 max pain level. Total open interest stands at 219,034 contracts, with call open interest of 113,427 and put open interest of 105,607.

The put-to-call ratio of 0.93 suggests a more balanced, yet still cautious, positioning compared with Bitcoin.

Advertisement
Ethereum Expiring Options
Ethereum Expiring Options. Source: Deribit

Sponsored

Sponsored

The gap between spot prices and max pain levels suggests that option sellers could benefit if prices remain suppressed into expiry. Meanwhile, traders holding directional bets may face losses if markets remain range-bound.

Notably, today’s expiring options are significantly lower than the $8.8 billion contracts that settled last Friday, because the January 30 event was for the month.

Institutions Hedge as Volatility Climbs

Nevertheless, analysts at Greeks.live say derivatives markets are showing clear signs of stress and repositioning, with volatility rising sharply and traders moving to protect portfolios.

Advertisement

“The $60,000 range [for Bitcoin] represents the consolidation zone prior to the Trump rally, where support remains relatively strong. Should a rapid dip occur in the short term, it may present a buying opportunity,” they wrote.

Sponsored

Sponsored

According to the analysts, options data indicate institutions and large players are urgently hedging and placing bets.

Bitcoin’s current-month implied volatility (IV) has surged to 100%, doubling since the start of the year, while the main contracts’ IV has also breached 50%, climbing 15% over two weeks.

Advertisement

With skew at a two-year low, the experts say options market structure is now entirely dominated by bearish sentiment, though some lottery-style buying of deeply out-of-the-money options has emerged.

“The market currently exhibits excessive panic, and conditions for a sustained BTC crash remain insufficient. Rapid risk-off liquidation could actually facilitate a market rebound,” Greeks.live analysts wrote.

Indeed, the market is in panic mode, and with good reason, as the Bitcoin price steadily edges toward the $60,000 psychological level.

Sponsored

Sponsored

Advertisement

The surge in implied volatility to 100% highlights the scale of uncertainty currently priced into Bitcoin markets, reflecting expectations of larger-than-normal price swings.

Expiry Could Reset Market Flows

Elsewhere, Deribit analysts note that options positioning is clustered around key strike levels, which may be influencing price behavior ahead of expiry.

“With protection demand already increasing and volatility repriced, this expiry could act as a short-term reset in dealer hedging flows. Expiry may remove positioning-related ‘gravity’ around big strikes, so price behavior after 08:00 UTC may differ from the days leading into expiry,” Deribit analysts stated.

The options expire at 08:00 UTC on Deribit. If those dynamics play out, markets could see increased volatility immediately after expiry as hedging flows unwind and liquidity conditions shift.

While bearish sentiment currently dominates derivatives positioning, panic-driven markets can sometimes produce sharp rebounds, particularly if large liquidations clear excess leverage.

Advertisement

Source link

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Crypto World

Bitcoin ETFs Record $434M Outflows Amid BTC Slide Below $70K

Published

on

Bitcoin ETFs Record $434M Outflows Amid BTC Slide Below $70K

Bitcoin exchange-traded funds (ETFs) continued to see outflows on Thursday, shedding almost $1 billion over the past two days as debate grows over their potential impact on the market.

Data from SoSoValue shows that spot Bitcoin (BTC) ETFs recorded $434 million in net outflows on Thursday, following $545 million in redemptions the previous day.

Monday’s $561 million in inflows was not enough to offset losses, leaving net weekly outflows at about $690 million as of Friday morning.

Spot Bitcoin ETF flows since Monday. Source: SoSoValue

The latest withdrawals came amid a sharp drop in Bitcoin’s price, which briefly touched $60,000 for the first time since October 2024, according to CoinGecko.

The community has struggled to identify clear catalysts for the downturn, and some have started to criticize Bitcoin ETFs even as analysts point to their resilience.

Advertisement

ETFs face “paper Bitcoin” criticism

The launch of spot Bitcoin ETFs in January 2024 was one of the most anticipated events in Bitcoin history, and was widely expected to accelerate BTC adoption through institutionalization.

Some analysts, however, argue that the institutionalization of Bitcoin via ETFs may have done more harm than good, claiming it contributed to undermining the asset’s scarcity — a key feature of Bitcoin’s fixed supply of 21 million coins.

“The same 1 BTC can now support an ETF unit, a future contract, a perpetual swap, an options delta, a broker loan, a structured note. All at once,” Bob Kendall, technical analyst and author of The Kendall Report, said in a Wednesday X post.

“That is not a market. That is a fractional reserve price system,” he added.

Advertisement
Source: Bob Kendall

Kendall’s concerns echo those previously raised by his peers about Bitcoin ETFs becoming a tool for Wall Street to “trade against” Bitcoin.

Before crypto ETFs launched, Josef Tětek, a Bitcoin analyst at hardware wallet provider Trezor, warned that such products could enable the “creation of millions of unbacked Bitcoin,” potentially depressing the value of actual Bitcoin.

Related: BlackRock’s IBIT hits daily volume record of $10B amid Bitcoin crash

As of Friday, total assets in spot Bitcoin ETFs stood at about $81 billion, with cumulative net flows totaling $54.3 billion, according to SoSoValue.

Altcoin ETFs showed a mixed picture, with Ether (ETH) funds shedding $80.8 million in outflows, while XRP (XRP) and Solana (SOL) ETFs saw minor inflows at $4.8 million and $2.8 million, respectively.

Advertisement

Magazine: Bitcoin’s ‘miner exodus,’ UK bans some Coinbase crypto ads: Hodler’s Digest, Jan. 25 – 31