Options markets might stop Bitcoin's recovery

The weekly BTC and ETH options expiry on October 3 is one of the factors to threaten the current bull market. The next event on October 10 is also closely watched for potential volatility. 

Options markets may turn into a short-term pressure factor for the price of BTC. On October 3, a total of $3.3B in BTC options expired on Deribit, putting pressure on the recent crypto market recovery. 

The event was smaller compared to the $22B expiry at the end of September, but traders still attempted to push prices closer to maximum pain levels. The influence of Deribit options is also diminishing, as more of the activity is shifting to BlackRock’s IBIT platform. The venue surpassed Deribit with over $38B in open interest and a disparity in its price range, suggesting a more bullish stance on BTC.

Deribit options markets still hold peak open interest

The weekly options expiry has maximum pain at $115,000 for BTC and $4,200 for ETH. The two leading assets are trading above the maximum pain price. BTC held above $120,000 ahead of the expiry, while ETH recovered above $4,500.

Shortly after the expiry, BTC dipped under $120,000, while ETH was just under the $4,500 range. The market now looks at the upcoming options expiry event, with maximum pain at $115,000 based on CoinGlass data. Attempts to push BTC back to this price range may lead to more volatility in the coming week. 

In total, $3.3B of BTC options expired, with just $900M for ETH. The smaller weekly events are still rebuilding liquidity as October trading promised to shift market sentiment. One of the expectations for the Deribit weekly options expiry was for the market to go higher, as traders are no longer attempting to push the price down to maximum pain levels.

Deribit options now have $28B in open interest, expected to rise by the end of the month as traders reposition. Open interest is higher right now, compared to $16B for October 2024.

Can crypto markets retain their gains?

Following a week with a dramatic recovery, the crypto fear and greed index remained neutral, but moved up to 57 points, closer to greed territory.

For crypto native traders, the available BTC liquidity may signal the price direction. BTC shifted to a higher range, with long liquidity accumulating at $118,000. Short positions increased at around $121,000 per coin. BTC is positioned in the middle of the range, with the potential to shift in either direction. 

ETH has thinner liquidity from short positions, with longs in the $4,300 range. Those positions may invite attempts to lower the price and cause liquidations. Despite the short-term fluctuations, the crypto market is still positioning for a year-end rally.

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