The advantage in the Bitcoin options market is in the bulls!

Bitcoin price has lost momentum over the past two weeks and some analysts have suggested that the bears will take control in the foreseeable future.

When looking at the derivatives market data, it can be clearly seen what is happening on the institutional investor front and how big players can affect the spot markets.

Bitcoin’s (BTC) open positions declined to $ 8.4 billion after peaking at $ 10.6 billion on January 14. Option contracts that expire on January 29, on the other hand, constitute 47 percent of all existing option contracts and stand out from the rest.

Bitcoin Price Index: 1 Bitcoin How Many TL? (BTC TL)

While the $ 4 billion due contract is significant, it should also be taken into account that these options are divided into call (neutral or bullish anticipation) and put (drop anticipation) options. Moreover, although the opportunity to buy Bitcoin for $ 52,000 on January 29 seemed logical a few weeks ago, it is not the case now.

Total open position of BTC options contracts. Source:

As can be seen in the data above, Deribit maintains its leadership with a market share of 83 percent. In order to understand how the January 29 maturity date can have an effect, it is necessary to compare both the buy and put options around $ 32,000.

It’s too early to panic

Most exchanges offer monthly terms, some also offer weekly options for short term contracts. The biggest expiry so far was the expiry of the $ 2.4 billion option contract on December 25, 2020. This number represented 31 percent of all open positions and shows how options spread over the year.

Total open position of Bitcoin option contracts by maturity date. Source: data shows that the contract of 107 thousand BTC will expire on January 29. This represents 45 percent of the total open positions in the options market.

It should be noted that not every option contract will be traded on the expiry date, as some trading prices are no longer illogical.

Total open positions of BTC options contracts due to expire on January 29, by transaction price. Source:

Although some call option contracts were traded when the bitcoin price exceeded $ 42,000, which expected a big rise, these contracts became worthless after the BTC price corrected.

More than 68 percent of call options that expire on January 29 are currently over $ 40,000 and therefore should not be taken into account in the calculation. The same is true for put options below $ 25k, and these two categories represent 76 percent of open positions.

After that, the value of call options below $ 40,000, which will expire on January 29, is $ 745 million. On the other hand, put options above $ 25,000 correspond to $ 300 million. After this evaluation, the value of the open positions that will expire on January 29 is 1.05 billion dollars and the sell / buy ratio is 0.40.

Bears are satisfied with $ 32K

Open positions of option contracts that expire on January 29, according to the transaction price. Source:

Although bulls have an advantage in the option market in general, put options dominate between $ 33-35 thousand. On the other hand, this advantage of 1,200 BTC can be balanced by a call option of 1,950 BTC at $ 28-32 thousand.

To summarize, for now, the bulls seem to take control at the expiry date on Friday.

The opinions and views expressed herein are those of the author alone and do not reflect the views of Cointelegraph. Every investment involves risk. Do your own research before making a decision.

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