$23.58 billion worth of Bitcoin options are about to expire. What signals are implied volatility hitting a new low releasing?

Question

【CryptoWorld】The Bitcoin options market is about to迎来a historic expiration event. According to the latest data, Bitcoin options with a notional value of up to $23.58 billion will集中到期on December 26th, marking the largest expiration date in the market’s history. Interestingly, Bitcoin spot prices are currently still oscillating within a recent range and have not experienced significant pre-expiry volatility.

Recent one-month options trading data reveal a shift in market sentiment. Trading activity has明显冷却, and the speed of capital inflows and outflows is slowing down. This drying up of capital flow usually indicates a problem—market optimism for subsequent gains is waning. However, it’s worth noting that demand for protective puts remains, suggesting that market participants have not完全放弃防守.

From the perspective of implied volatility, the situation is even clearer. The entire volatility curve has declined, with at-the-money implied volatility across all maturities dropping to about 44%, down more than 10 volatility points from previous highs. This reflects a weakening demand for hedging tools and a shrinking of upward leverage trading, indicating that the market is adapting to a relatively stable price environment.

The skew curve continues to show positive values—implied volatility for puts remains higher than for calls. This means that downside risk has already been fully priced in, and market concern about a decline is quite substantial. Conversely, this skew pattern does not resemble those typically seen before breakout moves.

Overall, arbitrage trading still dominates the options market, with capital allocation maintaining a defensive stance. With the rapid expansion of the Bitcoin options market over the past year, this record-breaking large expiration will become an important market node, recalibrating positions and risk exposures across the board. It is expected that after this expiration is completed and reset, market volatility will see a certain degree of increase at the start of the new year.

ForkThisDAO · Accepted Answer

23.58 billion dollars maturing, but the market is surprisingly calm, now that's strange

Funds have shrunk, and bearish orders are still being bought, feels like waiting for something

Volatility has dropped to 44%... it's a bit too cold, feels like something's about to happen

Is this the calm before a big wave of volatility or has everyone really left?

GasFeeSobber · Answer

$23.58 billion is about to dump the market, why are the coin prices still so sluggish?

Where did all the funds go? It's really outrageous.

With such low volatility, it's a relief that some people are still buying puts...

This doesn't feel right. The night before a major event, it's actually the calmest?

People are still buying put options, indicating that no one dares to hit the bottom.

down_only_larry · Answer

$23.58 billion poured in, but nothing moves, this is outrageous

Funds are frozen, who would dare to rush in now

Volatility has dropped so much, it shows everyone is betting on boring market conditions

People are still buying put options, indicating they are uncertain

Will a big show happen on the 26th? It feels too calm right now

Implied volatility at 44%, is this a sign of an upcoming surge?

A sudden strike when you least expect it, this is the most dangerous time