Key Points
- Bitcoin Options market is in suspense as high-stakes expiry on 27 December approaches, with a potential impact on Bitcoin’s price.
- Despite market volatility, bullish sentiment prevails with the $100k target in sight, but the outcome depends on the $11.8 billion worth of contracts set to expire.
Bitcoin Options expiry holds considerable significance as it can trigger sharp price movements. At present, the Options market shows a bullish sentiment with a dominant presence of call options, representing $7.9 billion in Open Interest.
Anticipation Ahead of High-Stakes Expiry
The Bitcoin Options market is currently on edge as the expiry date of 27 December draws near. Following a post-election capital flow surge, bulls are aiming for the $100k target, causing Open Interest to reach a record high of $50 billion.
However, hitting and maintaining the $100k mark are two distinct challenges. While the current bullish sentiment suggests a potential new all-time high, the Options market requires careful monitoring. The expiration of $11.8 billion worth of end-of-year call and put orders could significantly sway Bitcoin’s price in the near future.
Call Order Dominance Indicates Bullish Sentiment
Bitcoin is currently trading below $90k, with its market dominance exceeding 60%. Deribit leads in the Options market with a 74% share, while CME and Binance each hold around 10.3%. This concentration of activity on Deribit underscores where the majority of betting on Bitcoin’s price movement is taking place.
Coinglass data reveals that calls make up nearly 70% of the orderbook, indicating strong bullish sentiment. Many investors are betting on Bitcoin reaching $100k. However, if Bitcoin hits this target, a significant number of Options contracts will expire, most of which are Call Options. This could create selling pressure if many traders decide to exit simultaneously.
Therefore, the ability to maintain the $100k price level largely depends on how these contracts unfold. A temporary pullback could occur in two scenarios: when Call Option holders exercise their contracts and when Put Options begin to dominate.
Despite a temporary dip due to miner selling, long-term holders continue to maintain their positions. As more traders enter the Bitcoin Options market, volatility is reaching new highs each day.
Despite this, Bitcoin has maintained its upward momentum, indicating that long positions still dominate the market. This suggests that the bulls are holding strong, and the $100k target is within reach. However, uncertainty still looms in the Options market where the fate of $11.8 billion worth of contracts will ultimately decide whether Bitcoin enters the new year on a bullish or bearish note.
The latter seems more likely, given the high stakes associated with the $100k price target and the call orders set to expire as volatility rises in the days ahead.
