$13.6B in Bitcoin options expire Friday — Can bulls push BTC price to $100K?

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As a seasoned researcher with over two decades of experience in the financial markets, I have witnessed countless market cycles and events that shape the economic landscape. The upcoming Bitcoin options expiry on Nov. 29 presents an intriguing opportunity to gauge investor sentiment and assess potential price movements.

2024 will see Bitcoin’s most significant monthly options expiration of the year, with a staggering total value at risk of approximately $13.6 billion.

Less than 2% of BTC put options target $100K or higher

At this upcoming event, bulls could potentially drive Bitcoin’s value beyond $100,000, which emphasizes the importance of evaluating how call and put options, due to expire on November 29th, may influence the market.

For the last three weeks, the S&P 500 has found it difficult to sustain levels above 6,000, indicating that investors are growing more cautious. This change in investor feelings is mirrored by a decrease in the U.S. 5-year Treasury yield, which has dropped from 4.35% on November 15 to its current level of 4.12%.

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Investors increasingly prioritize government bonds’ relative safety, even at lower returns.

As a researcher, when I encounter times of economic unpredictability, usually fueled by concerns about a potential economic downturn, I observe a common investor behavior known as the “flight to safety.” This behavior encourages investors to liquidate their riskier assets in favor of safer investments.

Nevertheless, the 5% rise from Bitcoin’s $90,775 low on November 26 indicates that investor confidence is high, even with a 34% increase in value over the past month.

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On November 27th, economists from Pantheon Macroeconomics wrote a research note suggesting that inflation rates for US Personal Consumption Expenditures (PCE) could surpass 3% if President-elect Donald Trump imposes import tariffs. Meanwhile, analysts at Barclays commented separately that such tariffs might lead to higher prices for consumers.

“Temporary and uncertain tariffs of this nature create natural incentives to delay investments.”

Looking at the larger picture, the combined worth of Bitcoin call options (buy options) for November 29 stands at approximately $7.4 billion across Deribit, CME, OKX, Binance, and Bybit. This is significantly more than the $6.2 billion in open interest for put options (sell options), with a difference of around 19%. This discrepancy, however, is less pronounced than usual since crypto traders tend to favor bullish positions. In simpler terms, there’s a higher demand for buying Bitcoin options compared to selling ones, with a gap of about 19% in value.

Remarkably, it’s found that just about 20% of call options are set at $100,000 or higher for the November expiration, equating to a total potential value of approximately $4.25 billion.

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Conversely, fewer than 2% of put options aim for a price point of $100,000 or more. This means that the majority of these options have no practical value, and their total estimated worth is around $80 million.

Bitcoin call (buy) options favor bulls

Based on the current Bitcoin price movements, here are four possible situations that might occur with the Deribit exchange by November 28th. Whether call or put options will be available for this expiration time depends on the Bitcoin’s settlement price at 8:00 am UTC.

In simpler terms, we generally consider call options as tools for taking on optimistic, or ‘bullish’, positions in the market, while put options are often associated with neutral-to-negative, or ‘bearish’, stances. However, it’s important to remember that this is a basic perspective and doesn’t cover all intricate or sophisticated trading tactics.

  • Between $86,000 and $90,000: The net outcome favors the call (buy) options by $1.65 billion.
  • Between $90,000 and $94,000: The net outcome favors the call (buy) options by $2.6 billion.
  • Between $94,000 and $98,000: The net outcome favors the call (buy) options by $3.55 billion.
  • Between $98,000 and $102,000: The net result favors the call (buy) options by $4.58 billion.

In simpler terms, if the bears (those who believe Bitcoin’s price will decrease) want to make sure that the call options (bets on a price increase) do not pay off come November, they need to push Bitcoin’s price below $90,000 before then.

In other words, Bitcoin’s ability to withstand inflation worries indicates that its price might soar to $100,000 or more in the near future following the expiration of these Bitcoin options.

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2024-11-28 16:46