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Arman Shirinyan

While the price action itself brings more volatility to the market, option expiry might be another reason for the market to become even more unpredictable


The cryptocurrency market is currently experiencing a rapid volatility rise, which leads to a price action that was not expected by the majority of traders. In addition to that, the November options expiry is set for today and might add even more fuel to the volatility fire.

How options change the shape of the market

Options contracts are usually being used by professional traders to hedge their own positions whenever they expect the volatility to rise. In accordance to the open interest, the max pain price is being determined, which was $58,000.

Due to Bitcoin dropping below $55,000, most opened positions will not reach the strike price, which causes a major loss on the options market.

Skew analytics data
Source: Skew

Usually, the spot Bitcoin trading pair follows the derivatives like options or perpetual futures on various major exchanges. In this case, selling pressure on the spot market exceeded the power of derivatives.

Traders and experts note that Bitcoin’s price action is tied to the global risk-off on the financial market that is being confirmed by the performance of major companies on the market. Bitcoin most recently broke the correction with the stock market but is currently gaining back the same traction.

What does expiry mean for the market?

Options expiry usually does not affect the market price of an asset itself; instead, it affects the overall volatility. In the case of Bitcoin, we could clearly see the volatility spike. According to on-chain and market data, the 90-day volatility still remains relatively low compared to other periods.

Bitcoin Market Performance
Source: TradingView

As for now, Bitcoin is losing 6.7% of its market value while facing a “thanksgiving recovery” day before that brings the market a 9% recovery. The new local low on Bitcoin is now at $54,886. The last time Bitcoin was trading around the same price was back in the middle of October.

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