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After last week’s washout, spot continues to chop sideways as approach the festive holidays. While this may seem like a quiet week for markets, all eyes are on the massive expiry this Friday, where almost $20B notional across BTC and ETH options will expire. This represents almost half the total OI on Deribit.

Will we see the typical quarter-end vol selloff post expiry? We believe it’s quite possible especially if spot continues to range here and as option sellers continue to roll their shorts out. Unlike most option sellers who have to wait for collateral to be released post-expiry, Call buyers would have likely already rolled most of their positions. However, if BTC manages to break 100k, vols are likely to hold firm.

Meanwhile as BTC continues to struggle below 100k, we could also see alts start to play catch up again. A similar trend was observed a month ago where BTC was trading around these levels and ETHBTC bounced off 0.032 support. With BTC dominance still at 58%, we are closely watching for a significant drop below this level to confirm a rotation into alts.

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