The Bitcoin derivatives market is increasingly thriving, as evidenced by recent data relating to the options market.
According to data from laevitas.ch, a total of more than 45,000 Bitcoin options contracts were traded on December 16, rising to more than 50,000 yesterday.
The bulk is traded on Deribit, followed by OKX and Binance.
Today’s expirations of Bitcoin options
Most options expire on Friday, and today 21,000 options expire with a Put Call Ratio of 0.87 and a Maxpain point of $101,000, for a value of over $2 billion.
Also today, 173,000 options on ETH also expire, with a Put Call Ratio of 0.5 and a Maxpain point of $3,750, for a value of $590 million.
In particular, the over two billion dollars of expiring options on Bitcoin are a decidedly significant figure.
It should be remembered that options do not necessarily have to be redeemed upon expiry, like futures, precisely because their use is only optional. However, those that expire today will no longer be able to be used from tomorrow onwards, so anyone who intends to use them must do so immediately.
The fact is that it is probably the crypto derivatives markets, together with leveraged positions, that have intensified today’s drop in prices.
Spot Bitcoin ETFs
A separate discussion, however, concerns ETFs.
From December 2nd until the day before yesterday, spot ETFs on Bitcoin had recorded positive net inflows every day, always above 200 million dollars, and almost always above 400 with peaks even above 600.
Instead, yesterday, for the first time in weeks, they recorded net outflows of over 670 million dollars in a single day.
The hypothesis is that, as Christmas and the annual delivery approaches, ETFs have started to experience significant outflows because market makers are adjusting their positions.
The situation from this point of view is also similar for Ethereum, although with much lower figures. For example, the day before yesterday the inflows were only two and a half million dollars, and yesterday the outflows were less than a tenth of those of the BTC ETFs.
However, on December 5th the daily inflows on ETH ETFs well exceeded $400 million, but it was a coincidence: on all other days in December they exceeded 300 million only once.
The next Bitcoin options to watch
There will be many more options expiring on December 27th.
So the end of the year could really be a crucial moment, given that a lot of attention is concentrated from multiple points, even just for mere calendar issues.
However, on Friday 3 January there are very few options expiring.
The situation therefore seems destined to change with the start of the new year, even if from a price point of view we still don’t know how.
Precisely for these reasons there are already those who identify Friday 27 December as the key day, or the one that could give the strongest indications on the possible continuation of the bull run.
Note that currently the maximum volume peak for put options on Bitcoin is positioned at $90,000, while for call options it is at $100,000.
It is therefore no coincidence that the price of BTC is currently fluctuating within these two levels.
For put options, however, there are three other lower levels, albeit with decidedly lower volumes, placed at $85,000, $80,000 and $75,000.
However, for call options there are only two other significant levels, albeit with smaller volumes, placed at $105,000 and $110,000.
The current price of Bitcoin
Within such a framework, the current price of Bitcoin seems absolutely normal.
Of course, on traditional financial markets oscillations such as those of Bitcoin would always be interpreted as anomalous, but on crypto markets they are relatively common.
For example, one month ago the price of Bitcoin was at $92,000, and two months ago it was at $68,000.
The fact that only three days ago it recorded a new all-time high above $108,000 only means that, most likely, it had grown a little too much in the last thirty days.
In particular, given that the peak volume for put options is still positioned at $90,000, as long as the price of BTC remains above that figure it should not be necessary to redeem them. However, if it falls below that threshold, at that point it could also trigger a new descent towards much lower levels.
