On January 26, 2024, many thousands of Bitcoin options on Deribit will expire.
The majority are call options at a price of $50,000.
To be honest, call options are the majority overall, with the maximum number of put options concentrated at $37,000, which stops at 2,500 contracts, while at $50,000 there are over 9,700 call contracts.
Summary
Bitcoin options on Deribit for January 2024
Options are a type of derivative contract that allows you to acquire the right to buy or sell in the future at a defined price. They differ from futures precisely because they give the right but not the obligation, while futures contracts are inevitably settled at expiration.
The options in theory would serve to protect against potential losses or problems, since they can be either regulated or not before expiration. In reality, they are now very often used to bet on prices, or in any case to speculate.
The so-called call options are nothing more than the right to purchase an asset before a certain date and at a certain price.
So, on Deribit there are over 9,700 call options expiring on January 26, 2024 at a price of $50,000, which allow the owner to purchase BTC at that price before that date.
Instead, put options are used to acquire the right to sell a certain asset at a certain price before a certain date.
On Deribit there are over 2,500 put options expiring on January 26, 2024 at a price of $37,000, allowing those who own them to sell BTC at that price before that date.
The $50,000 level
From such a scenario, one could deduce that the majority of options speculators on Deribit are convinced that the price of Bitcoin could rise above $50,000 by January 26th.
In fact, in the event that this actually happens, they will be able to exercise their right to purchase their call options at $50,000 so that they can immediately resell at a higher price.
Obviously, the purchase of an option has a cost, regardless of whether it is redeemed or not, so in order for it to be convenient to redeem call options at $50,000, the price of BTC must be significantly higher.
The price is high because obviously in order to give the actual right to purchase BTC at $50,000 there must be someone willing to sell at that price before that date, and this justifies the fact that there are few call options at a lower price.
Bitcoin price in 2024: options on Deribit
On Deribit there are call options expiring today as well.
As for those expiring today, the majority are again call options at $50,000, but they are only 256 contracts. As for put options, the majority are at $42,500, but there are only 128.
The situation changes already if we consider those that expire tomorrow.
The majority, in fact, are call options at a price of $45,000, with almost 2,000 contracts. As for put options, there are 1,300 contracts at $40,000. Therefore, the scenario is completely different from both today’s and January 26th’s.
Taking into consideration all the deadlines, that is until December, there are more than 23,500 call options at $50,000, confirming that this is the key level that speculators are keeping an eye on at the moment. Just think that the maximum put options are at $40,000 but they are less than 5,700. The difference with the 23,500 call options at $50,000 is huge.
This scenario also suggests that options speculators on Deribit generally consider it likely that the price of BTC will continue to fluctuate within a range of $40,000 and $50,000.
The drop below $40,000
However, it is not at all certain that the price of Bitcoin will remain above $40,000. It must be said, however, that the options market often moves very quickly, so these numbers could also be updated at any moment.
Yesterday, for example, the correction of the Bitcoin price after the release of the false news about the postponement of the SEC’s decision on Bitcoin spot ETFs failed to bring the price below $40,000. In fact, it didn’t even manage to bring it below $41,000.
It was a show of strength, although the markets quickly discovered that it was a false news based only on rumors and not on verified facts or statements.
Many, on the other hand, are expecting a drop to $35,000, but at the moment this is a scenario that the markets do not seem to be pricing in yet. Just think that compared to 5,600 put options on Deribit at $40,000, there are only 2,600 at $35,000. However, it should be noted that there are 4,800 at $37,000 and 4,500 at $30,000.
So if on one hand it seems that the markets are betting on the resistance of $40,000, on the other hand there are not a few who instead believe that the price could also fall below this threshold.
The fact is that, although with the possible publication of the news of the approval of the ETF there could be a sell the news phenomenon, the coming months could be bullish, with the Fed’s interest rate cut, the halving and the possible success of the ETFs on the markets.
In light of all this, it seems possible that, in the event of a retracement, there could still be a rebound upwards.
