The cryptocurrency market is expected to experience increased volatility this week, with significant Bitcoin (BTC) and Ether (ETH) options contracts set to expire this Friday, November 29. These contracts, valued at $9.4 billion for BTC and $1.3 billion for ETH, will expire on the Deribit exchange at 08:00 UTC, right after the U.S. Thanksgiving holiday, potentially creating a post-holiday trading frenzy.
As of now, approximately 45% of the $9.4 billion in Bitcoin options expiring are “in-the-money” (ITM). Specifically, $4.2 billion is ITM, with 80% of those being call options. An ITM call means the strike price is lower than the current market price, making them profitable for holders as the expiry approaches. This buildup of ITM calls could lead to substantial volatility, as traders rush to close positions and secure profits, similar to the market movements observed on October 25 when over $4 billion in Bitcoin options expired, causing a 3% drop in BTC’s price.
Andre Dragosch, Head of European Research at Bitwise, noted that much of the put open interest is concentrated around the $70,000 strike price, though this outcome is unlikely. Instead, he expects temporary consolidation due to high profit-taking, as Bitcoin’s supply scarcity continues to support the price. The “max pain” theory, which suggests that the price may settle around the range of $70,000–$82,000 at expiry, seems less likely, according to Dragosch. However, the large gap between Bitcoin’s current price and the max pain price of $78,000 could potentially force market makers to hedge by purchasing Bitcoin, driving the price higher, potentially pushing Bitcoin toward the $100,000 mark.
On the other hand, out-of-the-money (OTM) options, which make up 55% of the total notional value, are predominantly put options, with $4.1 billion of the OTM options being puts. These are mostly hedges or bearish bets that are unlikely to materialize, meaning they are unlikely to exert much downward pressure on the market.
Dragosch also highlighted that the disproportionate concentration of Bitcoin open interest in puts is largely due to hedging, not outright bearish speculation. As the market shows strong upward momentum, with Bitcoin’s price above $98,000, the significant difference between the current price and the max pain point suggests that many call options remain deep in the money. This could lead to additional buying pressure from market makers, further fueling Bitcoin’s price rally toward the psychological $100,000 milestone.
