After a 160% increase over the past 3 months, the open interest on Bitcoin (BTC) options reached a new record-high at $12 billion. While this number might seem unusually high, it makes sense that the figure would increase as Bitcoin’s market capitalization surpassed $1 trillion.
Deribit BTC options open interest in USD. Source: laevitas.ch
Although Friday’s $3.2 billion expiry could negatively impact the market, these options are split among calls (neutral-to-bullish) and the more bearish put options.
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As shown in the chart above, Deribit exchange leads the market by holding an 85% market share. For the Feb. 26 expiry, 58,500 BTC contracts remain open and this is equivalent to $3.2 billion.
Before jumping to conclusions on whether the outcome might be bullish or bearish, it’s essential to take a more detailed view of the potential buy and sell pressure nearing expiry.
Paying for a $38,000 put (sell) option might have made sense three weeks ago, but this trade is