{"id":162126,"date":"2021-01-25T01:00:00","date_gmt":"2021-01-24T22:00:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/key-metrics-show-this-weeks-4b-bitcoin-options-expiry-favors-bulls\/"},"modified":"2021-01-25T01:00:00","modified_gmt":"2021-01-24T22:00:00","slug":"key-metrics-show-this-weeks-4b-bitcoin-options-expiry-favors-bulls","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/key-metrics-show-this-weeks-4b-bitcoin-options-expiry-favors-bulls\/","title":{"rendered":"# Key metrics show this week\u2019s $4B Bitcoin options expiry favors bulls"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a24964eb312a\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a24964eb312a\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/key-metrics-show-this-weeks-4b-bitcoin-options-expiry-favors-bulls\/#Its_too_early_to_panic\" >It\u2019s too early to panic<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/key-metrics-show-this-weeks-4b-bitcoin-options-expiry-favors-bulls\/#Skew_shows_market_makers_are_unwilling_to_take_upside_risk\" >Skew shows market makers are unwilling to take upside risk<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/key-metrics-show-this-weeks-4b-bitcoin-options-expiry-favors-bulls\/#Bears_are_reasonably_comfortable_at_32000\" >Bears are reasonably comfortable at $32,000<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Key metrics show this week\u2019s $4B Bitcoin options expiry favors bulls <\/strong>&#8221;<\/p>\n<div class=\"post-content\" data-v-5a136f3a>Over the past two weeks, Bitcoin price <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ears to have lost momentum and some analysts are suggesting that bears will be in control for the foreseeable future. <\/p>\n<p>Taking a look at derivatives market data provides a clearer picture of what is happening on the institutional side and how the moves of larger players may impact the spot markets. <\/p>\n<p>After peaking at $10.6 billion on Jan. 14, the open interest on Bitcoin (BTC) scaled back to $8.4 billion. The Jan. 29 monthly expiry continues to stand apart, totaling 47% of the options in play.<\/p>\n<p>Although a $4 billion expiry could be significant, one must consider that these options are split among calls (neutral-to-bullish) and the more bearish put options. Furthermore, having an opportunity to buy BTC for $52,000 on Jan. 29 might have made sense a couple of weeks ago, but not so much right now.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-01\/661f52e4-0cc0-4671-9aaf-729d3f3838b1.png\"><figcaption style=\"text-align: center;\"><em>BTC options aggregate open interest. Source: Bybt.com<\/em><\/figcaption><\/figure>\n<p>As the data above depicts, Deribit exchange remains the absolute leader with an 83% market share. Nevertheless, to understand how eventful this expiry could be, one must adjust data and compare both calls and put options near the current $32,000 BTC level.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Its_too_early_to_panic\"><\/span>It\u2019s too early to panic<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Most exchanges offer monthly expiries and some also hold weekly options for short-term contracts. Dec. 25, 2020, had the largest expiry on record as $2.4 billion worth of option contracts expired. This figure represented 31% of all open interest and showed how options are usually spread throughout the year. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-01\/2573c943-1975-45bb-bc7d-6da2a2d54978.png\"><figcaption style=\"text-align: center;\"><em>Aggregate BTC options open interest by expiry. Source: bybt.com<\/em><\/figcaption><\/figure>\n<p>Data from Bybt.com shows that Jan. 29 expiry calendar accounts for 107,000 BTC. This expiry date represents 45% of the aggregate options market open interest.<\/p>\n<p>It is worth noting that not every option will trade at expiry as some of those strikes now sound unreasonable, especially considering there are less than five days left.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-01\/33d05817-6f7b-4ab6-ac16-e50c1b0c664b.png\"><figcaption style=\"text-align: center;\"><em>BTC Jan. 29 aggregate options open interest by strike. Source: bybt.com<\/em><\/figcaption><\/figure>\n<p>As Bitcoin marked its new $42,000 all-time high, some ultra bullish call options were traded but as BTC price adjusted, those short-term options became worthless.<\/p>\n<p>Currently, over 68% of Jan. 29 call options at $40,000 and above should be disregarded for calculation. The same can be said for the bearish put options at $25,000 and below. These represent 76% of the open interest.<\/p>\n<p>This data leaves an estimated $745 million worth of call options below $40,000 for the aggregate options expiry on Jan. 29. Meanwhile, the more bearish put options above $25,000 amount to $300 million. Therefore, the adjusted Jan. 29 open interest stands at $1.05 billion while holding a 0.40 put-to-call ratio.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Skew_shows_market_makers_are_unwilling_to_take_upside_risk\"><\/span>Skew shows market makers are unwilling to take upside risk<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Analyzing open interest provides data from trades that have already passed, whereas the skew indicator monitors options in real-time. This gauge is even more relevant as BTC was trading below $23,500 just thirty days ago. Therefore, the open interest near that level does not indicate bearishness.<\/p>\n<p>When analyzing options, the 30% to 20% delta skew is the single most relevant gauge. This indicator compares call (buy) and put (sell) options side-by-side. <\/p>\n<p>A 10% delta skew indicates that call options are trading at a slight premium to the more bearish\/neutral put options. On the other hand, a negative skew translates to a higher cost of downside protection and is a signal that traders are bearish.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-01\/d83b6a5e-4efb-4272-85a0-dda65df043f8.png\"><figcaption style=\"text-align: center;\"><em>Deribit Bitcoin options 30-20% delta skew. Source: genesisvolatility.io<\/em><\/figcaption><\/figure>\n<p>According to the data shown above, the last time some bearish sentiment emerged was Jan. 10, when the Bitcoin price crashed by 15%. This move was followed by an extreme 30% to 20% delta skew as optimism reached 49, a level unseen over the previous past 12 months.<\/p>\n<p>Whenever this indicator passes 20, it reflects fear of potential price upside from market makers and professionals, and is considered bullish. On the other hand, the current 0 to 10 range that held since Jan. 20 is deemed neutral.<\/p>\n<p>While a $4 billion options expiry might be worrisome, nearly 74% of the options are already deemed worthless. Regarding the Jan. 29 expiry, bulls remain mainly in control due to its much larger adjusted open interest.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Bears_are_reasonably_comfortable_at_32000\"><\/span>Bears are reasonably comfortable at $32,000<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2021-01\/06b95bf7-d5fb-4361-88aa-9b26f02ed11c.png\"><figcaption style=\"text-align: center;\"><em>Jan. 29 BTC aggregate options open interest per strike. Source: Bybt.com<\/em><\/figcaption><\/figure>\n<p>Despite bulls having an overall advantage, the more bearish put options dominate expiries between $33,000 and $35,000. Nevertheless, this 1,200 BTC contract advantage is more than offset by the 1,950 BTC contract imbalance favoring the call options from $28,000 to $32,000.<\/p>\n<p>To conclude, as things currently stand, bulls seem in total control of Friday\u2019s expiry, although incentives between $28,000 to $35,000 are reasonably balanced. Overall there\u2019s not much to gain from either side to create additional volatility ahead of Jan. 29.<\/p>\n<p><em>The views and opinions expressed here are solely those of the <\/em><a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/noshitcoins\"><em>autho<\/em><em>r<\/em><\/a><em> and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.<\/em><\/p>\n<p><template data-name=\"subscription_form\" data-type=\"markets_outlook\"><\/template><\/div>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/key-metrics-show-this-week-s-4b-bitcoin-options-expiry-favors-bulls\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Key metrics show this week\u2019s $4B Bitcoin options expiry favors bulls &#8221; Over the past two weeks, Bitcoin price appears to have lost momentum and some analysts are suggesting that bears will be in control for the foreseeable future. Taking a look at derivatives market data provides a clearer picture of what is happening&#8230;<\/p>\n","protected":false},"author":1,"featured_media":162127,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMDEvNDcxMzU5YjgtMWVkYS00YjJkLTkzOGYtMDUyZmUzMzUwYTU0LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74862,74972,81209,74937,75012,74939,73785],"class_list":["post-162126","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-bitcoin","tag-bitcoin-futures","tag-bitcoin-options","tag-bitcoin-price","tag-derivatives","tag-market-analysis","tag-markets"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/162126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=162126"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/162126\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/162127"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=162126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=162126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=162126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}