As the year-end options expiry approaches on December 27, the Bitcoin market is abuzz with anticipation. The aggregate open interest for this event stands at a staggering $11.8 billion, with call (buy) options holding a strong advantage over put (sell) options. However, bears are not giving up yet and are determined to limit their losses by keeping Bitcoin’s price below $75,000.
The Options Market: A Dominant Force
Deribit, the leading options market maker, holds an impressive 74% market share, followed closely by the Chicago Mercantile Exchange (CME) and Binance at 10.3% each. OKX trails behind with a mere 4.3% share. This dominance is reflected in the current open interest figures: $7.9 billion for call options versus $3.92 billion for put options.
The Impact of Bitcoin’s Rally
Bitcoin’s remarkable 29% price increase since October has rendered most put options worthless, leaving bulls with a significant advantage. However, bears can still limit their losses by keeping the price below $75,000. The current market data reveals a clear imbalance in favor of call options at various strike prices.
Five Probable Scenarios
- Between $72,000 and $75,000: Call (buy) instruments hold a strong advantage with $1.4 billion in open interest compared to $470 million for put options. The net result favors calls by $930 million.
- Between $75,000 and $80,000: Calls dominate with $1.85 billion in open interest versus $270 million for puts. The imbalance favors calls by $1.58 billion.
- Between $80,000 and $85,000: Call options hold a significant advantage with $2.74 billion in open interest compared to $130 million for put options. The net result favors calls by $2.61 billion.
- Between $85,000 and $90,000: Calls lead the way with $3.38 billion in open interest versus $96 million for puts. The imbalance favors calls by $3.28 billion.
- Between $90,000 and $100,000: Call options hold an even stronger advantage with $4.52 billion in open interest compared to $74 million for put options. The net result favors calls by $4.45 billion.
The Bulls’ Advantage
To avoid a significant setback, bears must push the price down to around $74,500 by December 27. Conversely, bulls can maximize their gains by pushing BTC to $90,500 or higher by the same date. The current market data suggests that sustained bullish momentum is likely to continue into early 2025.
The Impact of Politics on Bitcoin
Recent events in the US have boosted investor confidence in Bitcoin, particularly with the election of President-elect Donald Trump. His campaign promises to reduce regulatory barriers and create a more favorable environment for cryptocurrencies are expected to positively impact the market.
Senator Cynthia Lummis’s legislation aims to amass up to 1 million Bitcoins over time, providing further support for the asset. The potential creation of a strategic Bitcoin reserve could also lead to increased demand for BTC. However, bears must remain vigilant and push the price down to minimize their losses.
Conclusion
The upcoming options expiry on December 27 promises to be an exciting event in the Bitcoin market. With aggregate open interest reaching $11.8 billion, both bulls and bears have a lot to gain or lose. While call options hold a strong advantage, bears can still limit their losses by keeping the price below $75,000. As the year comes to a close, one thing is clear: the future of Bitcoin hangs in the balance.
Related Articles
- Bitcoin on Track for $85K, Breaks Record $82.4K ‘Uncharted Territory’
- The Rise of Bitcoin and the Future of Finance
Stay up-to-date with the latest market news and trends by subscribing to our newsletter. Get critical insights to spot investment opportunities, mitigate risks, and refine your trading strategies. Delivered every Monday.
Subscribe Now
By subscribing, you agree to our Terms of Services and Privacy Policy. This article is for general information purposes only and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Follow Us on Social Media
Stay connected with us on social media platforms like Twitter, Facebook, and LinkedIn to stay updated on the latest market news and trends.
