The Bitcoin market, after hitting its annual high of $ 13,864, fell below $ 13,000 on October 28 and has since rebounded. As Bitcoin traded at $ 13.2k, at press time the outcome of the upcoming BTC options expiration remains undecided.
According to data provider Skew, more than 62,000 Bitcoin options are set to expire on Friday and concern has crept into the market again. The Bitcoin market has remained volatile over the past two weeks. Even though many saw a strong sign of a bullish take-off, the digital asset fell almost $ 13,000.
Open Interest had reverted to Bitcoin options as it marked a skewed ATH on October 27 near $ 3.583 million. This was a result of the positive sentiments moving in the market and gave traders the opportunity to hedge and lock in profits against existing price points. However, falling prices before expiration could put traders in an uncertain situation if they weren’t already.
Deribit insights shared this uncertainty among traders related to the next expiration. Deribit was one of the larger Bitcoin options platforms and noted that its term structure was on an upward slope, indicating that long-term returns were higher than short-term returns.
According to Deribit, like the stock market, even the BTC market had factored in potential volatility during election week from October 30 to November 6. This heightened volatility is expected to continue until the end of this quarter. With the 7% of the open interest at the Deribit expiration fixed on the $ 13,000 strike, the events leading up to the expiration may determine the direction of Bitcoin’s next move.
However, more often than not these speculations about the future and expiration of option contracts did not result in a notable event. Like the one on September 25 in which 87,000 BTC options were due to expire. This expiration did not affect the cash value of the digital asset. So even though the market has indicated full strength despite collapsing value, traders may want to watch for external events that could cause volatility to spike in the Bitcoin market to protect themselves.