Bitcoin Impacts: Market Volatility and High Risk Ratio Amid Significant Options Expiry

By: Eva Baxter

The behavior of Bitcoin has seen significant shifts as record-breaking options are poised to expire soon. On the verge of witnessing the expiration of over $9.5 billion in Bitcoin options open interest, Deribit, a leading crypto derivatives exchange anticipates crucial market reactions in terms of volatility and even upward pressure on Bitcoin's price. The open interest marked Deribit's largest option expiry ever, suggesting a dramatic increase in market activity and investor engagement on the platform.

On another hand, Bitcoin's sell-side risk ratio, assessing the comparative view of daily investor activity, hits a 3-year high. Surging from 0.12% to 0.777% from Feb 8 to March 13, this sharp increase is followed by assuring recovery, leading to some fluctuations in the market. However, the continuous shift above the 0.1% mark since Nov 2023 further underscores departure from market bottoms and move towards more active trading phases. This substantial turning point, possibly driven by investor optimism and profit-taking, could advocate a slow stabilization in the Bitcoin market.

Against the backdrop of such turmoil, Bitcoin price is speculated to have potent upsides if it clears the resistance zones around $71,500. However, new highs stand to encounter resistance, thereby restricting the price increase. Nevertheless, with Bitcoin Cash expecting a halving on April 4; a price bump looms.

These statements indicate that Bitcoin's volatility could possibly increase in the forthcoming days until the market stabilizes post the options expiration and the halving event, projecting notable upsides and fluctuations on course.