Bitcoin [BTC] Options Report on Expiration of $1 Billion Contracts: Deribit

Deribit Exchange, the leading platform for options trading at the moment, shared their insights on the impact of the expiry of the contracts on 26th June to the tune of $1 billion.

As recently reported on CoinGape, the increase in the volume and open interest of Options contracts has been massive since the time of halving.

Bets on Halving Action

Due to the presence of monthly and bi-monthly derivatives contracts Bitcoin halving is still having hysteria can still affect the price. Deribit points out that a lot of calls were covered as the price surged above $10,000. Traders were wary of the trend of falling prices post halving.

However, after the market crashed to $8,500 on 8th May, new spot Bitcoin longs added to the bullish side.

as pre-crash, there was wild abandonment in Jun26 upside Call strikes up to 32k, with an eye on post-halving euphoria. Post-crash, Puts were bought within structured products, new BTC longs, and by miners as protection.

End-users long OI wings, LPs (Liquidity Providers) net short.

It notes that the liquidity providers are net short, meaning that the traders are net-long at the moment.

Bullish or Bearish?

The report suggests that the outer bounds of Bitcoin’s price in the next few weeks are $5,000 for bears and $15,000 for bulls. The traders on Deribit and CME have a 2:5 put to call ratio which is generally bullish.

One of the primary uses of Options contracts is to hedge one’s future exposure since it is not an obligation. Hence, the large ratio of calls supports the bullish narrative but he the trader might only be ‘semi-bullish.’ Nevertheless, put might options bought to cover spot and future longs.

In conclusion, the exchanges note that volatility can be high if the traders exercise their options,

as expiry approaches and option deltas change rapidly, a big spot move in a thin market could be exacerbated by large OI strikes and necessary dynamic delta hedging

Furthermore, rollover to July and September contracts has also begun. Hence, the OI and volume of Options are likely to remain high for the next few months as well.

Who do you think will capture the current momentum, bears or bulls? Please share your views with us.