On the Bitcoin options expiration day, there are contracts with a notional value of $955 million

Friday is Bitcoin options expiration day as nearly $1 billion worth of contracts are set to settle or renew. Crypto markets were in retreat for much of the first week of the year, but will this event push them higher again?

According to Deribit, around 21,900 Bitcoin options contracts expire on January 5th. The event is about a tenth the size of last week's massive annual event that marked the end of the year.

Bitcoin options expiry sparks speculation

The notional value of today's Bitcoin contracts is approximately $955 million on options market leader Deribit.

The put/call ratio for this tranche is 0.62, meaning that about half as many call contracts (long contracts) are expiring as puts (short contracts).

The maximum pain point remains around $43,000. However, there is still a lot of interest in the $50,000 strike price with 23,884 calls.

The fact that there is such a large concentration of call options at $50,000 suggests that traders are expecting BTC prices to rise until the expiration date in January.

Open Bitcoin positions after expiration. Source: Deribit

According to Deribit, total OI has fallen to around $10.7 billion from last year's record levels.

Earlier this week, Greeks Live commented on the market decline regarding the possibility of the SEC rejecting spot Bitcoin ETFs next week.

It noted that options implied volatility fell to 52% this week and below 65% at expiration on January 12, before adding:

“Current monthly puts are now cheaper and block trades are starting to see active put buying, with options market data suggesting institutional investors are not very bullish on the ETF market.”

Read more: 9 Best AI Crypto Trading Bots to Maximize Your Profits

Ethereum Derivatives Outlook

Earlier this week, crypto markets plunged 5% on the latest leverage. There were around $700 million worth of liquidations, 85% of which were calls dominated by Bitcoin positions.

In addition to the billion-dollar Bitcoin options expiration, 255,245 million Ethereum contacts will also expire, according to Deribit. The notional value of these options is $574 million and the put/call ratio is 0.54.

During Friday morning trading in Asia, spot markets remained flat on the day, with total capitalization remaining at yesterday's level of $1.73 trillion.

Bitcoin options expiring today are unlikely to impact spot prices as all eyes remain on the ETF scene.

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