Will Markets Dump Even More Today With Huge $22B Crypto Options Expiry?

Around 146,000 Bitcoin options contracts will expire on Friday, September 26, and they have a notional value of roughly $17 billion.

This expiry event is a big one because it is the end of the month and the end of the third quarter, so there could be some volatility on spot markets, which have tanked this week.

More uncertainty from the US Federal Reserve has rattled markets as high-risk assets become less appealing, deepening the September correction.

Bitcoin Options Expiry

This week’s batch of Bitcoin options contracts has a put/call ratio of 0.76, meaning that there are more long contracts expiring than shorts, as the asset continues to retreat. Max pain is around $110,000, according to Coinglass.

Open interest (OI), or the value or number of Bitcoin options contracts yet to expire, is highest at $140,000, which has reached $2.7 billion at this strike price on Deribit. There is also around $2.2 billion OI at $120,000, but $95,000 is a popular strike price for short sellers with $1.9 billion in OI.

Total BTC options OI across all exchanges is around $60 billion, which is close to record highs. Additionally, total Bitcoin futures OI currently stands at $80 billion, which is still close to peak levels, according to Coinglass.

Following the market slump earlier this week, “implied volatility (IV) for major terms showed little change, but skew significantly shifted toward puts, with put premiums substantially exceeding call premiums,” said derivatives provider Greeks Live.

In addition to today’s bumper batch of Bitcoin options, there are around 1.3 million Ethereum contracts that are also expiring, with a notional value of $5.3 billion, max pain at $3,800, and a put/call ratio of 0.80. Total ETH options OI across all exchanges is around $18 billion, reports Coinglass.

This brings Friday’s combined crypto options expiry notional value to around $22.4 billion.

Crypto Market Correction Deepens

Crypto markets have continued their downward slide all week, with total capitalization falling to a four-week low of $3.84 trillion by Friday morning.

Bitcoin fell below $109,000 in late trading on Thursday, losing support at the $112,000 zone. The asset is now 12% down from its peak and poised for further losses as the ‘Septembear’ correction appears to be deepening.

Ethereum is even weaker, slumping to $3,830 before recovering to $3,950 on Friday morning in Asia. ETH is now 20% down from its all-time high.

The alcoins are a sea of red with larger losses for XRP, BNB, Solana, Avalanche, and Sui.

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