As crypto options worth fifteen billion dollars for Bitcoin, Ethereum, and XRP are about to expire, players in the crypto market are preparing for the aftermath. With the extreme fear sentiment in the market, we are expected to see more volatility as we’ve recently seen during the rise of Bitcoin and other major cryptocurrencies.
With the buy-the-dip strategy and the crypto market momentum leading towards the holiday season, Bitcoin has recently seen an increase of more than 10% in value over the past week. However, experts are predicting thinner liquidity will lead to profit-taking during the options expiry with a major drop in the market, with December profit-taking being the most likely month to trade.
According to reports, on December 1st, 2023, Deribit will see more than 147K BTC options worth about 13.42 billion dollars expire. With a put/call ratio of 0.56 bitcoin sentiment in the market remains positive. The max ‘pain’ value for Bitcoin is $100,000 which is likely to create a sell-off. Above the $90,000 and $100,000, mark however, many options traders are speculated to be bearish. Over the past day, put volume has increased significantly.
If there have been more put options for put volume than there have been for calls, that shows their volume is lower than the calls which means there are more likely to be losses on the call side. Call options are sold on the market in a bet that the crypto’s value will rise over/within the expiry of the options. Overall, the crypto market is likely to see negative price action for Bitcoin with further bearish sentiment from crypto traders.
Most likely to see the extreme sentiment of fear in crypto is the result of economic conditions worldwide as many traders are likely to be risking their money in the market. Overall, the crypto market is therefore gearing towards negative short term and extreme long term sentiment of fear likely to profit from all the options set to expire.
Closing trades has mostly stabilized after the highly volatile recent trades with open interest matrixing at the $100K level although all traders are still fearful, Deribit stated.
According to Glassnode, Bitcoin remains static with low liquidity levels and losses being finally realized. A defensive options strategy coupled with futures liquidations is the sign of caution amongst traders. $93K-$96K is the buyer supply block and is a level Bitcoin must decisively break to gain further upside.
Bitcoin’s position at $91K indicates traders are betting on the Fed to announce a 25bps rate cut in December, however, volume suggests caution with trading ranges having decreased by 30% in the last 24 hours.
Ethereum is being paid the most attention, with $1.73 billion in ETH options, over 574,000, set to expire. A put to call ratio of 0.48 indicates a majority of calls reflecting extreme positiveness after a recent bullish turn.
With a low max pain of approximately $3,400, calls outnumbering puts, and put prices being as low as $3,014, a rapid bullish run is very likely. Although there has been major deliquification as stated by Deribit, ETH has sentiment stretching across its key levels of support and resistance.
As per data, XRP options worth $15 million are being liquidated at a put-call ratio of 0.41. The max pain price is at a dollar 2.30, a major level for the price since there is a lot of marine activity responsible for price movement.
XRP is trading at $2.19, a decrease of about 1% in the last day, at a trading volume that has dipped 30%. For the analysts, there is an opening for the price to increase towards a $2.60 price point if there is a recovery after a bounce from the lower channel price point.
Considering the options expiry of Bitcoin, Ethereum and XRP, the market is very sensitive and Trade is likely to be putting on risk. We expect to observe a profit and a significant market movement that would to changes for the global crypto market in December.
