Bitcoin Options Expiry on August 28 May Trigger Volatility at $75,000 and $80,000 Levels

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Bitcoin options market activity ahead of August 28 expiry could spark volatility near $75,000 and $80,000 levels. With $6.4 billion in Deribit options set to expire, call options outweigh puts, showing strong bullish bias. The $75,000 and $80,000 strikes hold $236 million and $157 million in open calls, respectively. Deribit’s Shaun Fernando warned of heightened sensitivity. Fear and greed index readings suggest market sentiment remains skewed toward optimism.

Bitcoin, the leading cryptocurrency, has surpassed the $81,000 level in recent days, reaching its highest level in three months thanks to its strong recent surge.

The rally is thought to be influenced by a decline in US Treasury yields, pressure on the dollar, increased institutional demand for spot Bitcoin ETFs, and the closing of short positions.

After Bitcoin tested above $81,000, the cryptocurrency market is preparing for the options trading session to be held on Friday. These options are particularly significant as they fall on the last Friday of both the week and the month.

According to weekly data, approximately $6.4 billion worth of Bitcoin options will expire on the Deribit derivatives exchange on August 28th. The fact that call options outnumber put options indicates that bullish sentiment remains strong. However, the simultaneous expiration of such a large volume of options could lead to increased market volatility.

$75,000 and $80,000 Levels Stand Out!

According to Coindesk, 44,639 of the BTC options are call contracts and 37,061 are put contracts. Accordingly, the put/call ratio is at 0.83, and a ratio below 1 indicates that the overall expectation for price increases is stronger in the current positioning.

Looking at the data, the strike prices of $75,000 and $80,000 are particularly noteworthy in the call options market. At this point, there are approximately $236 million worth of open call positions at $75,000, while the nominal value of call positions at $80,000 is around $157 million.

Bitcoin’s recent rise to $80,000 means market makers need to manage option risks at these levels. This could increase trading activity and lead to sharper price fluctuations and increased volatility around key levels.

Speaking to Coindesk, Deribit Chief Risk Officer Shaun Fernando stated that the upcoming expiry date is a development to be closely watched. According to Fernando, the fact that approximately 20% of Bitcoin open positions on Deribit will expire during this expiry period, combined with the sharp price movements of the past week, makes the market even more sensitive.

*This is not investment advice.

Continue Reading: Watch Out for Bitcoin This Friday: Two Levels Are Very Important! Volatility May Increase! Here Are the Details

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