Bitcoin Options Market Overview

On November 4, the Bitcoin options market hit a striking new high in open interest. This phenomenon is pivotal in understanding current trends. It’s like finding out your favorite band is reuniting just as they announce a five-hour concert—you’re excited but also curious about what it all means for ticket sales.

Expiration Events and Unusual Behavior

Fast forward to November 6, and a staggering $470 million in open interest is set to expire. This isn’t your typical month-end or quarter-end scenario, where liquidity usually heaps up like leftovers from Thanksgiving. The dynamics are surprisingly unique this time.

Where Is All the Action Happening?

Currently, the open interest is centralized, with

• Deribit claiming 75%
• Bit.com holding 13%

This concentration is almost like a popular diner—everyone’s crowding around the special of the day while ignoring the other dishes on the menu.

A Surprising Ratio: Puts vs. Calls

In a twist, both exchanges show 65% of the outstanding notional value in put options. This is the reverse of what’s usually observed in the broader market, which typically favors call options. It’s akin to expecting a blockbuster movie at the box office, only to find everyone has bought tickets for the indie film next door.

Analyzing Call and Put Options

Diving deeper, we can see:

• Call options: There are 6,050 BTC call options priced between $13,500 and $14,750 from Deribit, supplemented by Bit.com and OKEx with additional holdings.
• Put options: At the same exchanges, 4,700 BTC worth of put options huddle around the $13,250 to $14,750 mark.

This creates an immediate sell-side pressure estimated at $98 million against a buy-side of $114 million, making for an exhilarating match-up! However, as it stands now, many put options sit with significantly diminished value, almost like that expired coupon you found in your wallet right after it was too late to use it.

Market Sentiment Shifts

Despite prior bearish sentiment that affected prices leading up to the U.S. elections, the tide appears to be turning. The current landscape may indicate that previous bearish trades, akin to a well-planned heist, are unwinding—much to the delight of those positioned on the buy-side.