Bitcoin's options market is gearing up for increased volatility as it approaches a significant quarterly expiry on Friday, analysts report. Over 20% of the open interest on Deribit, a major derivatives exchange, is expected to expire in-the-money, amounting to more than $2.7 billion in notional value. The total size of the options expiry on Friday is projected to exceed $10 billion, highlighting substantial trading activity anticipated around this event.

The upcoming quarterly expiry coincides with what is known in financial markets as a "quadruple witching," a day when contracts for index futures, index options, options, and futures all expire simultaneously. This convergence typically leads to heightened volatility and increased trading volumes across markets, including cryptocurrencies.

Luuk Strijers, CEO of Deribit, emphasized the potential impact of this expiry, noting that the substantial in-the-money open interest suggests significant market movements as these contracts near expiration. Analysts are closely watching the options skew, which indicates a shift in sentiment towards Bitcoin potentially turning bullish by July 12.

Market dynamics around Bitcoin futures also reflect strategic positioning among traders. Michael Dunn, President of Bitnomial Exchange, noted that many market participants have rolled over their June futures contracts to July. This maneuver allows traders to maintain open interest while avoiding the risks associated with contract expiration, especially amidst ongoing price volatility.

At the time of writing, Bitcoin was trading around $60,972, marking a 2% decline over the past 24 hours. Concurrently, Ether, the second-largest cryptocurrency by market capitalization, saw a 1.2% decrease to $3,342. The broader cryptocurrency market, represented by a global market cap of $2.36 trillion, experienced a 1.1% drop over the same period, according to Coingecko data.