Bitcoin Options Storm at Year-End: $14 Billion in Limbo
TechFlow Selected TechFlow Selected
Bitcoin Options Storm at Year-End: $14 Billion in Limbo
The market is at a critical juncture for year-end closing.
Navigating Web3 tides with focused insightsBy BitpushNews
Bitcoin has experienced a roller-coaster week, swinging from its all-time highs to near one-month lows.
Less than a week ago, Bitcoin surged past $108,000, reaching a new record high. However, within the past 24 hours, its price briefly dropped below $92,500—the lowest level since November 26.
Over the past week, Bitcoin has fallen approximately 13%. Ethereum and Solana declined by 18% and 15%, respectively, while XRP dropped 12% to $2.18. The meme coin sector was hit harder, with Dogecoin falling 22% over the same period.
The market is entering a critical year-end period. On one hand, the largest-ever Bitcoin options expiry is approaching, potentially triggering significant volatility. On the other hand, macroeconomic conditions—particularly the direction of Federal Reserve policy—are adding additional pressure on the market.
$14 Billion Options Expiry
This Friday, $14 billion worth of Bitcoin options open interest (OI) will expire. According to data released by Deribit CEO Luuk Strijers, the put-to-call ratio for this expiry stands at 0.69, meaning there are roughly seven put options for every ten call options. This suggests some underlying bearish sentiment in the market. Moreover, the number of contracts expiring—146,000—is substantial, double the size of the March 2025 expiry (73,000 contracts).
Strijers further explained that these expiring contracts account for 44% of the current total Bitcoin options open interest ($32 billion). Deribit expects more than $4 billion worth of contracts to be exercised upon expiry, which is bound to trigger significant trading activity.
Deribit’s volatility index (DVOL) has seen sharp fluctuations recently. Strijers noted this reflects considerable disagreement among traders about the future direction of the market.
"The previously dominant bullish momentum is weakening," Strijers emphasized. "The market is currently in a highly leveraged upward state. A sharp downturn could trigger a rapid cascade effect. Everyone’s attention will be focused on this upcoming options expiry, as it may set the tone for market performance in 2025."
Crypto Fund Inflows Plummet, ETFs See Record Outflows
Although crypto funds remained in net inflow territory last week, after Federal Reserve Chair Powell delivered hawkish remarks, crypto products suffered a record single-day outflow, sharply reducing overall inflows. Data from CoinShares shows that investors injected a total of $308 million into funds last week, including Bitcoin ETFs. However, on Thursday alone, investors pulled out a record $576 million, with outflows rising to $1 billion on Friday.
Institutional Activity May Slow, But Market Still Holds Rebound Potential
David Lawant, Research Head at crypto broker FalconX, wrote in a report that while short-term price volatility remains the most likely scenario before a "bullish trajectory" emerges in the first quarter of 2025, Sean McNulty, Trading Head at liquidity provider Arbelos Markets, believes: "Bulls should aim to keep Bitcoin’s price above $90,000 through year-end. If it breaks below that level, it could trigger further liquidations."
According to MarketWatch data, the so-called "Santa Rally" typically occurs during the final five trading days of the year and the first two trading days of the new year.
Valentin Fournier, analyst at BRN, said that although trading activity in the crypto market may decline in the remainder of this year, investors should not abandon hope for a Santa Rally. He wrote in a report on Monday: "With an expected decline in institutional activity and retail trading volume likely to remain subdued over the final two weeks of the year, volatility should continue to decrease. While ongoing negative momentum could lead to modest losses, a strong rebound is still possible."
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
比推 BitpushNews
