Bitcoin options open interest has reached a new record of $63 billion, with a notable concentration of positions at higher strike prices across various derivatives platforms. This significant milestone underscores the active positioning by traders in anticipation of substantial price movements and reflects a heightened conviction regarding the near-term direction of the cryptocurrency.
Deribit, a platform owned by Coinbase that accounts for approximately 80% of the global crypto options volume, reported its open interest alone hitting $50 billion. The exchange highlighted an increasing number of put contracts at $100,000 strike prices, which collectively amount to around $2.17 billion.
However, the data reveals even larger positions established at significantly elevated strike prices. Open interest for Bitcoin options now exceeds $2 billion each at the $120,000, $130,000, and $140,000 levels. This distribution strongly indicates that traders are predominantly positioning themselves for upward price movements.
Open interest serves as a metric to measure the total value of outstanding options contracts that have not yet expired or been settled. The record-high levels observed signify a high degree of engagement within the derivatives markets, as participants are actively preparing for potentially major shifts in Bitcoin's price.
The concentration of open interest at strike prices that are well above the current market price suggests that traders are either betting on substantial price appreciation or are actively hedging against such a scenario. Luuk Strijers, the CEO of Deribit, has noted a building trend of call activity around the $120,000 mark and above, which points to traders positioning themselves for potential upside volatility.
Upcoming Expirations and Market Sentiment
Approximately $5.1 billion worth of Bitcoin options are scheduled to expire on Friday on the Deribit platform. The current put/call ratio stands at 1.03, indicating a relatively balanced distribution between long and short positions. The calculated max pain point for this expiration is at $114,000, a level at which the majority of these contracts would likely close at a loss for their holders.
The exchange's analysis suggests that overall positioning remains balanced, with puts slightly outnumbering calls. Based on the current distribution of contracts, it appears that traders are more inclined to hedge against potential downside risks rather than positioning for major sell-offs.
Context of Bitcoin's Recent Performance
The record-breaking open interest in Bitcoin options follows a period of sustained strength for the cryptocurrency. Bitcoin has experienced a notable increase of 2.30% over the past seven days. The data derived from the derivatives market suggests that market participants are anticipating continued volatility, with a discernible bias towards higher prices in the upcoming trading sessions.