Bitcoin’s upcoming $10.5 billion options expiry has sparked intense interest, with bulls needing a 9% rally from current levels to gain the upper hand. The cryptocurrency’s price surged to an eight-day high on Wednesday, forming a double bottom near the $62,500 level. Despite this recent gain, Bitcoin’s price remains 21% lower than it was one month ago, suggesting bulls are unlikely to come out ahead in Friday’s options expiry.
Options Expiry Breakdown
Deribit leads the market with a 76% share, totaling $4.5 billion in call options and $3.4 billion in put options. OKX follows with $610 million in calls and $385 million in puts, representing 10% of the aggregate total. CME ranks third with $255 million in calls and $287 million in puts, accounting for a 5% market share.
At first glance, the aggregate put options open interest appears 25% lower than equivalent call options. However, a more detailed analysis reveals that neutral-to-bullish strategies were caught off guard by Bitcoin’s sharp decline below $75,000 in early February. 88% of call options on Deribit will expire worthless if the Bitcoin price remains below $70,000 on Friday.
BTC Friday call (buy) options at Deribit. Source: Deribit
Put Options Advantage
Even when discarding calls targeting $105,000 and higher, which are part of complex multi-leg strategies with lower acquisition costs, only 37% of the remaining bets sit below $75,000. Realistically, this puts the effective call options open interest on Deribit at about $780 million. Given these current conditions, it is worth analyzing whether bearish traders have now overplayed their hand.
BTC Friday put (sell) options at Deribit. Source: Deribit
$1.44 billion in put options open interest on Deribit targets Bitcoin prices below $60,000, although it is unlikely that bets at $40,000 and $45,000 effectively aimed for those specific levels. Calendar strategies and ratio spreads are typically associated with extreme price targets, as they do not require a price crash to achieve profitability.
Market Correlation and Sentiment
Put options at $72,000 and above total $1.15 billion in open interest on Deribit, which is more than enough to offset existing call options. Although Bitcoin’s decline toward $60,000 was likely not tied to macroeconomic trends, the relevance of Nvidia’s (NVDA US) earnings outcome after the US market close on Wednesday should not be understated.
The success of the artificial intelligence sector, particularly the sustainable operational margins of the world’s largest companies, remains decisive for every risk market. History suggests that Bitcoin’s correlation with the stock market seldom lasts long, but the fate of Friday’s $10.5 billion options expiry could be decided by stock market performance.
Bitcoin 30-day correlation vs. Nasdaq 100 Index. Source: TradingView
The current 90% correlation between Bitcoin and the Nasdaq 100 Index is clear evidence that the tech play is the leading driver of trader confidence, but as long as Bitcoin price remains below $75,000, the advantage continues to favor put options.
Probable Outcomes
Below are three probable outcomes for Friday’s BTC options expiry at Deribit based on current price trends:
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From $65,000 to $69,000: The net result favors the put (sell) instruments by $1.15 billion.
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From $69,001 to $71,000: The net result favors the put (sell) instruments by $845 million.
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From $71,001 to $74,000: The net result favors the put (sell) instruments by $470 million.
Ultimately, Bitcoin bulls need a 9% rally from the present $68,800 level to flip the tables on the February options expiry.
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