Hitting and holding $100K Bitcoin price depends on $11.8B end-of-year BTC options expiry

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As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed countless bull and bear runs, market crashes, and recovery phases. Having closely followed Bitcoin since its inception, I can confidently say that the upcoming December options expiry holds immense potential for the world’s leading cryptocurrency.

preparations are being made in the market for Bitcoin’s (BTC) year-end $11.8 billion options expiration on December 27 at 8:00 am UTC. As of late, call options (options to buy) appear to have a strong edge, but bears could potentially minimize their potential losses by ensuring that the price of Bitcoin remains below $75,000.

Currently, the cumulative value of active call options stands at approximately $7.9 billion, whereas the open interest for put options is comparatively lower at about $3.92 billion. This disparity can be attributed to Bitcoin‘s significant surge of 29% since October, which may have rendered a large portion of the put options valueless.

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In simple terms, Deribit is the front-runner in the options market, accounting for about three-quarters of the total market share. The Chicago Mercantile Exchange (CME) and Binance follow closely with a 10.3% share each, which is nearly double that of OKX, standing at approximately 4.3%.

Investors known as bulls and bears have a motivation to impact Bitcoin’s current market value, and in the days leading up to the options’ expiration, the possible results hinge on the balance of options set at different price levels.

December Bitcoin options expiry could ignite a BTC price surge

As an analyst, I can certainly attest that President-elect Donald Trump’s election victory has significantly bolstered investor confidence, particularly given his campaign pledges to replace US Securities and Exchange Commission Chair Gary Gensler on his first day in office and the remarkable number of pro-cryptocurrency legislators who triumphed in the recent elections for the US House and Senate. This shift in political climate could potentially bring about a fresh perspective and policies that are more favorable towards digital assets, contributing to increased optimism among investors.

A president who is supportive of Bitcoin mining could work towards removing regulatory hurdles, which might pave the way for the approval of a “strategic Bitcoin reserve.” Moreover, this president might instruct law enforcement agencies to store, instead of selling, Bitcoin confiscated from illegal activities. Senator Cynthia Lummis’ proposed legislation aims to accumulate up to one million Bitcoins gradually over time.

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In December’s option expiration, the total open interest has accumulated to approximately $11.8 billion. However, the recent surge past $80,000 took bearish traders by surprise, resulting in a smaller total for the final tally.

If Bitcoin’s price stays around $88,000 at 8:00 am UTC on Dec. 27, it means that only $96 million worth of put options (options to sell) will be active. This is due to the fact that the option to sell Bitcoin at $85,000 won’t matter if the price is higher than that level when the options expire.

Bitcoin bears target sub-$75,000 to minimize losses

Given below are five possible situations considering the current pricing pattern. Each scenario indicates a potential profit imbalance, although these figures don’t factor in intricate strategies as there is currently no simple way to quantify their effect on profits.

  • Between $72,000 and $75,000: $1.4 billion in calls vs. $470 million in puts. The net result favors the call (buy) instruments by $930 million.
  • Between $75,000 and $80,000: $1.85 billion calls vs. $270 million puts, favoring calls by $1.58 billion.
  • Between $80,000 and $85,000: $2.74 billion calls vs. $130 million puts. favoring calls by $2.61 billion.
  • Between $85,000 and $90,000: $3.38 billion calls vs. $96 million puts, favoring calls by $3.28 billion.
  • Between $90,000 and $100,000: $4.52 billion calls vs. $74 million puts, favoring calls by $4.45 billion.

If traders known as “bears” want to prevent a significant loss before the end of the year, they should aim to decrease the price of Bitcoin to around $74,500. On the other hand, “bulls” can increase their profits by trying to push the price up to approximately $90,500 by December 27th. The data from options markets suggests that Bitcoin will continue to show a positive trend, or bullish sentiment, into early 2026.

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This post serves as a source of general knowledge but doesn’t constitute legal or financial guidance. Any perspectives, ideas, or opinions shared here are solely those of the author and may not align with or represent the views of CryptoMoon.

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2024-11-14 01:12