How Does the Time Horizon Affect the Premium Difference between OTM and ITM Options?

A longer time horizon increases the extrinsic value for both OTM and ITM options because there is more time for the underlying crypto price to move favorably. This typically widens the premium difference between OTM and ITM options, as the OTM option gains more time value relative to its low intrinsic value.

The greater the time, the greater the chance for a significant price swing to make the OTM option profitable.