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Bitcoin's $1.1 billion option expiration: What should we expect?

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Written by

Kevin Lopez
Published on

November 24, 2022

Key points: 

  • Tomorrow at 8:00 UTC, $1.14 billion worth of BTC will expire.
  • Contrary to last week's expiry, the bulls clearly have the upper hand at the moment.
  • However, if Bitcoin manages to surge hundreds of dollars to $17,000 over the next few sessions, it could fall as it faces stiff resistance there. 

Bitcoin options expire at the end of the month. Tomorrow at 8:00 UTC, $1.14 billion worth of BTC will expire. Data from Coinglass shows that traders remain divided, with little difference between bullish and bearish.

At press time, the November 25 call option OI was 36,465.67 BTC. On the other hand, the bearish OI is 32,520.2 BTC. As a result, the call/put ratio exceeds 1 [1.12 to be exact]. Contrary to last week's expiry, the bulls clearly have the upper hand at the moment.

Source: CoinglassSource: Coinglass

Strike price-wise breakdown

The psychological levels of $16,000, $17,000, and $18,000 appear to be the most attractive for traders. Exactly 16,000 with a Call OI of 1.06,000 BTC and a Put OI of 3.3,000 BTC, favoring the bears.

However, at 16.5k — the price BTC is currently hovering at — calls are overshadowing puts [1.72k BTC vs 979.1 BTC].

Typically, most bearish bets are placed on lower strike prices, while bullish bets are focused on upside targets. This time, however, things seem to be a little different. As the chart below shows, with a strike price of $17,000, bearish bets far outweigh bullish bets.

Source: CoinglassSource: Coinglass

So, ideally, with Bitcoin hovering around $16,500 by expiration, the losses would be minimal as the calls prevail. Conversely, if Bitcoin were to trade at $16,000 or $17,000, it could succumb to pressure from bearish traders and pull back.

At $18,000, there are almost equal numbers of calls and puts [2.67,000 BTC vs. 2.38,000 BTC]. So, if prices stay at quoted levels, expiration could prove irrelevant as call-bear bets at face value cancel each other out. That scenario seems unlikely as the market is currently buying low.

However, if Bitcoin manages to surge hundreds of dollars to $17,000 over the next few sessions, it could fall as it faces stiff resistance there. So the odds of the largest cryptocurrency hovering around the "ideal" price [$16.5k] at expiration now look pretty good.

Source: TradingViewSource: TradingView


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