Analysis: US midterm elections and concentrated Bitcoin options expirations heighten market volatility risk

TechFlow reported on October 29, citing Bloomberg, that Bitcoin has been hovering around the $80,000 level this week. Bitcoin options worth about $11 billion will expire on October 30, and with the US midterm elections approaching on November 3, the market may face greater volatility. Among the options about to expire, call options outnumber put options, and contracts with strike prices concentrated at $90,000, $95,000, and $100,000 are likely to expire worthless in the near term.

Analysis suggests that if market makers are in short positions, their hedging activities may accelerate a Bitcoin drop below the $75,000-$78,000 range; if they are in long positions, it may cushion the downside. Some option sellers may wait until after the US midterm elections on November 3 to establish new positions, leaving the market without the usual gamma supply to buffer price swings, and volatility may rise further before and after the election results are announced.

Source: TechFlow