The Stressful $10.5 Billion Wait in Bitcoin: Will the Bears or the Bulls Win?

Bitcoin and altcoins have experienced a slight recovery in the last 24 hours after sharp declines. Bitcoin is once again approaching the $70,000 mark, while Ethereum has surpassed $2,000.

While altcoins are also seeing double-digit increases, the expiration date for option contracts in the crypto market will arrive, as it does every Friday.

These options are particularly significant because they fall on the last Friday of both the week and the month.

According to weekly data, approximately $10.5 billion worth of Bitcoin options will expire on the Deribit derivatives exchange on February 27th.

Analysts say that if the current price trend continues, put (sell) options are highly likely to have a structural advantage.

According to analysts’ calculations, Bitcoin needs to rise by more than 10% from its current level of $68,100 for bulls to take control of the options market.

According to analysts who examined options data on an exchange basis, Deribit holds 76% of the total market with $4.5 billion in call options and $3.4 billion in put options. OKX has $610 million in call options and $385 million in put options, representing 10% of the market. CME has $255 million in call options and $287 million in put options, representing approximately 5%.

At first glance, the number of open positions in call options appears to be 25% higher than in put options, but analysts note that put options are more advantageous due to strategies that shift from neutral to bullish.

Accordingly, if the Bitcoin price remains below $70,000 on Friday, 88% of the call options on Deribit will become worthless.

In conclusion, when considering the profit and loss structure based on price range, put options are found to be in an advantageous position compared to call options.

Bitcoin bulls need the price to rise above $75,000 before the February option expiry date to shift the balance. This means a 10% increase is needed. As long as BTC remains below $75,000, the advantage will remain with put options.

*This is not investment advice.