$600Million in Bitcoin Tickets May Expire Soon

On Friday, $600M in Bitcoin options expire, providing bears justification to price BTC beneath $16K.

For Friday’s $600M BTC options expiry, bears are better positioned, but bulls might turn the tables if Bitcoin prices rise beyond $18,000. Nobody is to blame for Bitcoin.

Bulls for putting $20,000 or more wagers on the November 18 expiration of the $600M weekly options. After all, this level had offered dependable resistance since October 25 and had maintained itself for about two weeks. The default scenario, however, quickly altered on November 8 when a liquidity crisis stopped withdrawals from the FTX market. Trades were taken by surprise, and over 48 hours, leverage purchasers worth over $290M were liquidated.

How Is the Market Responding?

The market responded to the news rapidly, fluctuating over the last seven days between $15,800 and $17,800. Investors are concerned that additional important players may be forced to liquidate their bitcoin assets due to contagion concerns.

Since FTX had large deposits from important industry players, its bankruptcy indicated that other participants would suffer big losses. For instance, BlockFi has a credit line with FTX US for $400M. Collateralized yield platform SALT revealed large losses following the FTX crash on November 15 and stopped withdrawals. Similar occurrences at the Japanese cryptocurrency exchange Liquid raised market concern overall. The options expiration on November 18 is particularly important since Bitcoin bearish may make $120M by pushing BTC below $16,500.

Although there is $600M in open interest for the weekly options expiration on November 18, the real amount will be less since bulls were overconfident. These traders were off the mark, putting bearish bets around $18,000 and higher when BTC fell off the charts after the crash of FTX.

The $300M put (sell) open interest and the $300M call (buy) options are perfectly balanced, as seen by the 1.00 call-to-put ratio. Nevertheless, most optimistic wagers will lose their value once Bitcoin approaches $16,500.