- About $17 billion in Bitcoin options are set to expire, among the largest expirations on record.
- Experts warn that if Bitcoin falls below $108,000, automatic selling could push it down to $96,000.
- The options expiration coincides with a key U.S. inflation report, influencing short-term price moves.
- A lower-than-expected inflation reading could reduce selling pressure and create room for a recovery.
- Long-term sentiment remains positive, with significant purchases of call options for higher price targets by year-end.
Nearly $17 billion in Bitcoin options are scheduled to expire on Friday, marking one of the most significant expiration events in the cryptocurrency’s history. The expiration of these options, which are financial contracts tied to the future price of Bitcoin, coincides with the release of an important U.S. inflation report.
According to options exchange Deribit, an estimated $22.3 billion in total crypto options will expire as the third quarter ends, with $17.06 billion specifically in Bitcoin options. Greg Magadini, director of derivatives at analytics platform Amberdata, called this “the largest on the board,” highlighting increased volatility around the $109,000 and $108,000 price levels.
Analysts note that a significant number of options dealers have open positions around $108,000 and $109,000. If Bitcoin’s value drops below these levels, automated selling could occur. As Magadini explained, “a short gamma position means dealers could be forced to sell into a declining market, exacerbating a drop.” In this context, “short gamma” describes a scenario where traders must react quickly as prices fall, often increasing volatility. Data shows a move below $108,000 could drive Bitcoin’s price toward $96,000, especially if broader markets remain weak.
At the time of reporting, Bitcoin traded at around $109,100, down 3.8% on Thursday and 6.5% over the past week, according to CoinGecko data. Market participants are also closely watching the U.S. Core PCE inflation release, with month-over-month forecasts at 0.2%. If the report shows higher-than-expected inflation, experts caution this could support the U.S. dollar and deepen Bitcoin’s correction.
Conversely, Maja Vujinovic of FG Nexus stated that a softer inflation report could lead to a sharp upward move for Bitcoin, with wider positive expectations for the final quarter of the year. Magadini adds that while short-term risks remain, reduced inflation-fighting by the U.S. Federal Reserve could send Bitcoin’s price much higher. Current options data also indicates strong interest in higher year-end values, with many investors buying call options at $120,000 and $140,000 strike prices.
The results of the options expiry and inflation release are expected to shape Bitcoin’s direction in the coming weeks.
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