Sure, here’s the rewritten content while keeping the HTML tags intact:
Bitfinex analysts caution about an unprecedented $18 billion worth of Bitcoin options set to expire this week.
Summary
- A staggering $18 billion in Bitcoin options will expire this week
- Market makers are expected to react by selling spot BTC, according to analysts at Bitfinex
- BTC volatility is likely to remain subdued ahead of the expiry
Bitcoin faces an unprecedented options expiry of $18 billion, which is expected to dampen volatility. Bitfinex analysts noted that the accumulation of call options between $115,000 and $125,000 has created a high-gamma situation that effectively constrains the BTC price within a tight range, as mentioned to crypto.news on Friday, September 26.
“An $18 billion notional weekly expiry is unprecedented, generating significant gamma concentrations in the strike range where spot prices currently reside,” stated the analysts at Bitfinex. As the expiry approaches, dealers dynamically hedge delta, which can stabilize the price near the strikes with the largest open interest and limit actual volatility.
Lower volatility anticipated for Bitcoin this week
This week’s expiry is the largest ever in dollar terms and is likely to significantly influence price movements. Additionally, the clustering of options around Bitcoin’s current trading levels is expected to create a “pinning” effect, which will likely reduce volatility.
“Historical trends indicate that substantial expiries often lead to reduced volatility as the cutoff approaches, followed by a more definitive directional shift in the 24–72 hours thereafter,” explained Bitfinex analysts. “In the short term, we anticipate muted, range-bound trading with increased gamma sensitivity. Keep an eye on the $115.2k pivot and the $120k cluster as critical inflection points.”
Ultimately, whether Bitcoin experiences a breakout or breakdown will largely hinge on the options market. Traders anticipating a breakout might have to wait until after the expiry, given the structural dynamics at play. However, after these positions are resolved, natural price discovery can proceed.
