After a 160% increase in the past three months, the open interest rate on Bitcoin Options (BTC) has reached a new all-time high of $ 12 billion. While this number may seem extraordinarily high, it only stands to reason that this number would increase when Bitcoin’s market value exceeds $ 1 trillion.
Although Friday’s $ 3.2 billion expiration date may negatively impact the market, these options are categorized into buy (bullish neutral) and more bearish options.
As shown in the chart above, Deribit is leading the market with an 85% market share. As of February 26, 58,500 Bitcoin contracts are still open, which equates to $ 3.2 billion.
Before drawing conclusions about whether the outcome might be bullish or bearish, it is important to take a close look at potential buying and selling pressures as the maturity date approaches.
Paying a $ 38K put option might have made sense three weeks ago, but the deal is now worthless. Therefore, in order to properly assess the impact of the upcoming exit, they must be excluded.
On February 26th, BTC options will open interest in the event of a strike. Source: bybt.com
On the flip side of these worthless offers of under $ 40,000, there are some pretty high-pitched calls for as much as $ 88,000. With less than a week left until the expiration date, a 63% increase in Bitcoin’s price appears unlikely.
As explained above, the neutral sell options are largely concentrated to the bearish between $ 18,000 and $ 40K. Currently, more than 80% of February 26th offers are located in this region so it should not be considered as potential price pressures.
The remaining 4,550 BTC offering options, which are currently valued at $ 245 million, provide incentives to keep BTC below $ 52,000.
More bullish options between $ 36,000 and $ 56,000 are 17,670 Bitcoin contracts, equivalent to $ 955 million in open interest. So, the most suitable option for the open interest rate from February 26th is $ 1.2 billion, and you have a rate of 0.20.
For bears looking to extend their position through March 26, a position of $ 44,000 is currently trading at $ 1,970 per contract. It would take a loss of 16% of BTC’s current price of $ 54,000 to make any profit.
At the moment, the bulls are fully in control of Friday’s expiration, especially given the significant imbalance in favor of the buyers. Regarding potential downside conversion activity, the risk return looks unattractive.