As the crypto market anticipates the expiration of approximately 15,100 Bitcoin options contracts on February 9, valued at a notional value of $700 million, the question on everyone’s mind is whether this event will ignite a weekend rally. The crypto markets have been on an upward trajectory throughout the week, but the impending options expiry could introduce fresh volatility.
Bitcoin Options Expiry Dynamics
According to Deribit, the notional value of the expiring Bitcoin options contracts is $700 million, with a put/call ratio of 0.82. This ratio suggests a slightly higher inclination toward calls or long contracts over puts or short contracts. Notably, this week’s expiry event is smaller than the previous week’s, but it still carries the potential to influence spot market momentum.
At the $50,000 strike price, there is substantial open interest, with 15,447 call contracts totaling a notional value of $714 million. Additionally, the $60,000 strike price has seen an increase in bullish sentiment, evidenced by 11,600 call contracts.
Earlier in the week, Greeks Live reported a significant block trade, signaling a potential market-moving event. A whale reportedly placed a substantial bet on a significant market shock of 10% or more, emphasizing uncertainty about the direction, a rarity in whale investments.
Ethereum Options Expiry in the Mix
In tandem with the Bitcoin options expiry, 193,000 Ethereum contracts are also set to expire, carrying a notional value of $473 million and a put/call ratio of 0.39. The $2,400 strike price holds $450 million in open interest, a level reached in spot markets on February 8.
The combination of Bitcoin and Ethereum options expiry adds an extra layer of complexity to market dynamics, and traders are keenly observing the potential repercussions on both leading cryptocurrencies.
Crypto Market Outlook
As of now, the crypto markets are closing the week on a positive note, exhibiting a 2.5% gain and reaching a total capitalization of $1.83 trillion. Bitcoin is leading the gain with a 3.3% increase, briefly surpassing $46,000 during the Asian trading session. However, encountering resistance at this level, Bitcoin retraced to $45,969 at the time of writing.
Ethereum, despite being relatively stable, has not mirrored Bitcoin’s gain, trading at $2,444 during the Friday morning Asian session. Altcoins are displaying a mixed performance, with Cardano (ADA), Litecoin (LTC), and Immutable (IMX) making gains, while TRON (TRX) and Chainlink (LINK) are in the red.
Weekend Rally Speculation
The convergence of Bitcoin and Ethereum options expiry, along with the overall positive market sentiment, raises speculation about a potential weekend rally. Derivatives traders and market analysts are closely monitoring the expiration event, anticipating its impact on spot market momentum.
As the crypto community awaits the outcome, the weekend could unfold with heightened activity, influenced by the dynamics of expiring options contracts and the broader market sentiment. Traders should remain vigilant, as the weekend may bring unexpected shifts in the crypto landscape, guided by the aftermath of the significant options expiry.The potential for a weekend rally is intricately woven into the fabric of options dynamics, market sentiment, and macro factors.
The coming days will unveil the unfolding narrative, and traders are advised to approach the weekend with a nuanced understanding of potential scenarios. The cryptocurrency market, known for its resilience and capacity for surprises, may chart a course that aligns with or defies expectations.
