140 billion US dollar BTC options are about to expire: market volatility increases, AltCoin may Rebound

As an important Options expiration approaches, the encryption currency market is preparing for a crucial stage of increasing Fluctuation. On December 27, up to $14 billion of Bit options will expire, which is a significant event that could reshape short-term price trends and affect investment strategies. Analysts expect this event to intensify trading activity, leading to significant Fluctuation in prices and increased market turmoil.

The open interest contracts of Bit reflect traders' bullish prospects, with market sentiment leaning towards optimism. However, this bullish trend faces obstacles as holidays typically bring lower trading volume and liquidity, which may exacerbate price Fluctuation.

This Friday, there will be a record-breaking $14 billion Bit options expiration, with expiring contracts accounting for 44% of the total open interest during the expiration period on Deribit exchange, making it the largest open interest in the history of the exchange. The CEO of Deribit exchange stated that this significant event may intensify market fluctuation and potentially trigger a chain reaction due to higher leverage levels in the market.

As of this writing, $4 billion worth of Bitcoin options (28% of the total open interest of $14 billion) are expected to expire "in the money (ITM)" on Friday, bringing profits to buyers. These positions may be closed or rolled over (transferred) to the next expiry date, which may cause market fluctuations.

Although high Fluctuation can benefit the buyer by increasing the chance of 'in-the-money' options before expiration, it also brings risks to traders holding bullish positions. If the Bit price approaches $98,000, traders may feel the need to reassess their positions, which could lead to market correction.

GSR portfolio manager and trader Simranjeet Singh said, "I suspect a significant portion of the outstanding contracts for BTC and ETH will expire on January 31 and March 28, as the most recent liquidity anchor at the beginning of the new year." He also pointed out that the outstanding interest rates for the expiring put options and call options on Friday were 0.69, meaning that for every 10 outstanding call options, there are 7 outstanding put options. The outstanding call option contracts are relatively high, providing asymmetric upside potential for buyers, indicating a skew towards leverage to the upside.

The expiration on December 27th is an important key point for the market. If it can close above $105,000, it will consolidate the bullish momentum and provide support for the optimistic sentiment in 2025. On the contrary, if it falls below $95,000, it will provide a temporary opportunity for bearish traders to control the market.

Deribit CEO Luuk Strijers said that the previously dominant bullish trend has stagnated, leading to a high leverage rate in the market. If there is a significant downward trend, this positioning will increase the risk of a rapid snowball effect, and everyone's attention is focused on this expiration because it may shape the narrative for the new year.

Despite the recent stagnation of Bit, the upcoming options expiration could be a catalyst for the surge of altcoins. Investors are eyeing attractive levels near $90,000 for Bit, indicating that altcoins could benefit from any potential correction in Bit's price. The interaction between traditional and digital markets, along with the impact of the US stock market on encryption assets, adds additional uncertainty to this festive week.

QCP Capital analyst pointed out that "as BTC continues to struggle below 100,000, we may also see alternatives starting to catch up again." He added that a similar trend was observed a month ago when BitCoin traded at current price levels. The Ether/BitCoin ratio rebounded from the support level of 0.032 at that time, stimulating the trend of altcoins. The encryption currency market often experiences cycles where BitCoin leads and altcoins follow closely. Investors who enjoy new market returns seek additional returns, and funds flowing into altcoins can cause significant short-term gains.

<140 billion dollar BitCoin options expiring: market Fluctuation increasing, altcoins may rebound> This article was first published in "Block Times".