Bitcoin Set for Largest Monthly Options Expiry in 2024: Bulls Have a Pivotal Opportunity
With a total exposure of $13.6 billion, Bitcoin is poised to face its largest monthly options expiry this year on November 29. The event presents bulls with a crucial chance to push the price above $100,000, making it essential to assess the impact of call (buy) and put (sell) options set to expire.
Sentiment Shift in Traditional Markets
The S&P 500 has struggled to maintain levels above 6,000 over the past three weeks, indicating growing investor caution. This shift in sentiment is reflected in the United States five-year Treasury yield, which has declined from 4.35% on November 15 to the current 4.12%. Investors are increasingly prioritizing government bonds’ relative safety, even at lower returns.
Macro Economic Uncertainty and Risk Aversion
Periods of macroeconomic uncertainty, often driven by fears of an economic slowdown, typically trigger a flight to quality, prompting investors to exit riskier assets. However, the 5% rebound from Bitcoin’s $90,775 low on November 26 suggests that confidence remains strong amid 34% gains over the last 30 days.
Potential Inflationary Pressures
In a research note dated November 27, economists at Pantheon Macroeconomics said that US Personal Consumption Expenditures (PCE) inflation could rise above 3% if President-elect Donald Trump implements import tariffs, according to Yahoo Finance. Separately, Barclays analysts remarked: "Temporary and uncertain tariffs of this nature create natural incentives to delay investments."
Bitcoin Options Market
From a broader perspective, Bitcoin call (buy) options for November 29 hold an aggregate notional value of $7.4 billion on Deribit, CME, OKX, Binance, and Bybit, surpassing the $6.2 billion in open interest for put (sell) options by 19%. This disparity is narrower than typical trends, as crypto traders often lean bullish.
Scenario Analysis
Below are the four most probable scenarios for the Deribit exchange based on current price trends. The availability of call and put options for the November 28 expiration will depend on Bitcoin’s settlement price at 8:00 am UTC.
This analysis assumes that call options are primarily used for bullish positions, while put options reflect neutral-to-bearish strategies. However, it is crucial to note that this is a simplified approach and does not account for more advanced or complex trading strategies.
- Between $86,000 and $90,000: The net outcome favors the call (buy) options by $1.65 billion.
- Between $90,000 and $94,000: The net outcome favors the call (buy) options by $2.6 billion.
- Between $94,000 and $98,000: The net outcome favors the call (buy) options by $3.55 billion.
- Between $98,000 and $102,000: The net result favors the call (buy) options by $4.58 billion.
Pressure on Bears
The bears face substantial pressure to drive Bitcoin’s price below $90,000 before the November options expiry to prevent call options from prevailing. However, Bitcoin’s resilience amid inflation concerns suggests that prices could reach $100,000 or higher soon after these BTC options expire.
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