Bitcoin has seen some rather lackluster price action in the past few days. After its most recent $ 10,000 rejection, the cryptocurrency found itself stuck in a bearish trend and remains around $ 8,840.

Although this decline has led the cryptocurrency to lose more than $ 1,000 of its price, the speed of the fall has been quite moderate, with buyers struggling to cement the $ 8,800 as a region of strong support.

This support may not last much longer, as the expiration of contracts at CME can generate volatility due to traders who speculate about these positions.

Half of the open contracts at CME expire on Friday

CME's Bitcoin products have seen tremendous growth in recent times, with total open contracts on the platform recently setting new all-time highs.

Traders have been using their BTC options and futures heavily, and the popularity of these products is clearly perceived when looking at open interest contracts.

Currently, CME's Bitcoin futures have about $ 420 million in outstanding interest, marking a slight decline from the historic highs of $ 532 million.

Increase in open contracts and volume at CME. Source: skew.

Options on the platform also saw growth, with outstanding contracts rising from approximately $ 20 million in the first months of 2020 to highs established last week of $ 174 million.

Total BTC options outstanding at CME.
Total BTC options outstanding at CME. Source: skew.

Now, 50% of open contracts for both futures and options on the platform are expiring this week, observed the Skew data platform.

Could this increase volatility?

Traders using contracts and futures often “roll” their contracts from the month they are due to expire for future months.

This allows them to maintain the same position despite the expiration of the original contract and is done by selling the first month's contract to buy one with a later maturity.

The quick sale of these contracts may have implications for Bitcoin's price action, although it is important to note that CME's total share in the crypto market still remains quite small.

Thus, the change in the position of options among traders on the platform, which will be seen before Friday, may have only moderate effects on the market.


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