Originally published on: November 28, 2024
Bitcoin is gearing up for its most significant monthly options expiry since 2024, with a whopping $13.6 billion at stake.
This imminent event presents a golden opportunity for the bulls to rally and potentially propel Bitcoin’s price of $97,184 past the coveted $100,000 mark. As the Nov. 29 deadline approaches, it is crucial to analyze the potential impact of expiring call (buy) and put (sell) options on the market.
Recent market trends indicate a sense of caution among investors, with the S&P 500 struggling to sustain levels above 6,000 over the last few weeks. This shift in sentiment is mirrored in the United States five-year Treasury yield, which has dipped from 4.35% to 4.12% since Nov. 15.
Investors are increasingly seeking the relative safety of government bonds, even if it means settling for lower returns.
Despite macroeconomic uncertainties and concerns of an economic downturn triggering a flight to quality, Bitcoin has shown resilience. A 5% rebound from its recent low of $90,775 on Nov. 26 signals robust confidence, accompanied by a 34% surge in the past month.
Analysts speculate that US Personal Consumption Expenditures (PCE) inflation could exceed 3% if certain policies are implemented, highlighting potential market fluctuations.
Looking at Bitcoin call options set to expire on Nov. 29, they hold a significant value of $7.4 billion, surpassing the $6.2 billion in put options by 19%. This narrow gap between bullish and bearish bets diverges from standard trends in the crypto market, where traders typically lean towards optimism.
Notably, a mere 20% of call options have strike prices at or above $100,000, while less than 2% of put options target the same high range, significantly reducing their notional value.
As the expiry date approaches, the market is poised for various scenarios based on current price trends. The outcome will depend on Bitcoin’s settlement price at 8:00 am UTC on Nov. 29.
While bears are under pressure to drive Bitcoin below $90,000 to prevent call options from prevailing, the cryptocurrency’s resilience amid market uncertainties leaves room for optimism. The potential for prices to surge beyond $100,000 post-expiry remains on the table.
This analysis serves as an informative guide and does not constitute investment advice. Readers are encouraged to conduct thorough research and consider their risk tolerance before making any financial decisions.
