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Ok - so having compared the November and December #bitcoin 
options data I see a lot of similarities but one important difference which makes me think we might not get the doomsday scenario I was fearing earlier in the week.
THREAD.
options data I see a lot of similarities but one important difference which makes me think we might not get the doomsday scenario I was fearing earlier in the week.THREAD.
Firstly - just to say the @DeribitExchange Open Interest is HUGE. November was 55k BTC (~$1bn). December is 86k BTC and the increased price makes that a total of ~$2bn.
These options are now a major part of the market.
These options are now a major part of the market.
The December 25th expiry is notable as it is a quarterly contract, so it has been trading for about 9 months - hence the amount of OI that has built up.
Max Pain is calculated as being the point at which options buyers realise the least value from their contracts. In traditional markets there is a tendency for price to gravitate towards Max Pain as expiry approaches and we seem to see the same in #bitcoin .
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Two days before the November expiry, Max Pain was at $16k and spot price was around 20% higher at $19,300. Almost immediately as the US markets closed for Thanksgiving the #bitcoin price started to fall, reaching a low of $16,200 the afternoon before the expiry.
price started to fall, reaching a low of $16,200 the afternoon before the expiry.
When the November options expired at 8am UTC on November 27th price was around $17k and then almost immediately started rising with no real pause until $19,800 just as the US market re-opened after Thanksgiving.
Today we are around 30% above this Friday’s Max Pain price of $18,000. With traditional markets around the world set to close tomorrow afternoon and not re-open until after Christmas
, I wouldn’t rule out similar price action.
, I wouldn’t rule out similar price action.
The only major difference I see this month from last is the Put/Call ratio (1.68 in November vs 1.04 today).
A possibility is that the Thanksgiving Dump was triggered by other market participants who had bought Puts in order to hedge/profit from a lower price.
A possibility is that the Thanksgiving Dump was triggered by other market participants who had bought Puts in order to hedge/profit from a lower price.
In conclusion. If we haven’t seen a major downside move by the time we sit down for Christmas lunch I think we can all have an extra glass of sherry to celebrate.
