A notable development is occurring in the derivatives market in the crypto industry. Ahead of the upcoming Bitcoin quarterly option expiration, put options with a strike price of $20,000 are gaining attention on Deribit exchanges, according to analyst James Van Straten.
These options, with a nominal value of approximately $596 million, show investors are positioning themselves for a potential sell-off scenario due to the effects of geopolitical tensions in the Middle East.
If you look at the distribution of options, the market has a fairly wide range of expectations. The three major strike prices are $125,000 ($740 million) for call options, $75,000 ($687 million) for put options, and $20,000 ($596 million) for put options. Total notional value of expiring options reaches $13.5 billion, with open interest reaching $195,719 $BTC. Of this, 120,236 $BTC call option and 75,482 $BTC It’s a put option.
A strike price of $20,000 seems pretty low considering Bitcoin’s price is currently trading at just under $70,000. For these options to be profitable, Bitcoin would have to lose more than 70% of its value from current levels. However, our analysis suggests that a significant portion of these positions may not have been opened based on direct expectations of a decline, but rather to profit from a low-probability scenario. This suggests that investors are using these options more as part of profit enhancement or volatility strategies.
Looking at overall market sentiment, the options market appears relatively stable despite high uncertainty and panic. The put/call ratio is 0.63, indicating that call options remain dominant and the market is showing a slight uptrend. On the other hand, the $75,000 level, which stands out as the biggest sticking point, is considered an important threshold that could have a magnetic impact on Bitcoin price as the expiry date approaches.
*This is not investment advice.
