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- The high Bitcoin option expiration on Friday is expected to increase the overall volatility as investors re-adjust their portfolios in line with the October bullish narrative.
- More Bitcoin Option traders have set call bets with a high rate of expiration amounting to about 22.9 percent at the end of October.
The crypto market could experience heightened volatility over the weekend and coming weeks as more than $700 million worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire. According to market aggregate data provided through Coinglass, the total option open interest comprises about 213,121 BTC in call bets compared to 107,085 BTC in put trades. In the 24 hours leading to the early New York trading session on Friday, the ratio of calls to puts was about 62 percent to 37 percent. Thereby indicating more Bitcoin option traders are anticipating an imminent bullish breakout in the coming days.
The overall bullish outlook from the options traders coincides with the general statistics that show October of the pre-halving mostly ends with an upward trajectory. The odds were significantly increased after Bitcoin price closed in September, which is viewed as a bearish month, with a 4 percent difference between the opening and closing. In this regard, most Bitcoin option traders have set the end of October as the expiration date, which could significantly influence the short-term price action to a bullish outlook.
Bitcoin Options Expiration Coincides with Ethereum
As Bitcoin Options trades recorded a notable expiration on Friday, the Ethereum (ETH) ecosystem also posted about 200,000 Ether in Options contract expiration. Interestingly, the majority of the Ethereum Options traders had set a call bet with a ratio of 0.87 against the put options. According to market aggregate data provided through Coinglass, the Deribit crypto exchange offered the largest volume of Ether option trading. The total options open interest call vs put ratio for the Ethereum trading stood at around 71 percent to 28 percent on Friday, thus showing a bullish outlook in the coming weeks.
Notably, the total Options open interest in the Ethereum market stands at about 2,420,114 Ether in call bets compared to about 945,721 Ether in put trades. The high call bets on the Ethereum options market coincide with a recent futures ETF frenzy, which indicates a notable demand from institutional investors amid notable adoption from retail traders. Moreover, the Ethereum network remains the undisputed king of DeFi and smart contracts with about $20 billion in total value locked (TVL) and over $65 billion in stablecoins market capitalization.
Market Outlook
The crypto market has significantly grown in the past few years leading to the Chinese government rethinking the ban status through Hong Kong pro-crypto regulations. With a high demand from institutional investors seeking to hedge against the high global inflation, the crypto market is expected to grow exponentially in the coming years with a high probability of overtaking the Gold market. Nonetheless, the crypto market is expected to trade within a horizontal range until some months after the fourth Bitcoin halving, which is expected to trigger a supply vs demand shock.
