Can $6.6 Billion Bitcoin Options Expiry Today Impact Market Decline?
This week, approximately 107,000 Bitcoin options contracts are set to expire, collectively representing a notional value of $6.6 billion. This event coincides with the end of the month, making it notably larger than typical end-of-week expirations, potentially leading to increased market volatility.
The current batch of BTC derivatives features a put/call ratio of 0.5, indicating that twice as many long (call) contracts are expiring compared to shorts (puts). The max pain point, where most losses are expected to occur, is identified at $57,000, slightly lower than the current spot prices.
Despite the market uncertainty, bullish sentiment dominates the Bitcoin options landscape, with over $340 million in open interest at higher strike prices such as $70K, $75K, and $80K. Furthermore, the total open interest escalates to $590 million at $90K and $770 million at the $100K strike price, as reported by Deribit.
Greeks Live, a provider of crypto derivatives analytics, noted a challenging period for the crypto market in June, characterized by a more pessimistic atmosphere as Bitcoin and Ethereum prices approached the max pain point, a level previously deemed improbable by investors.
In addition to the substantial volume of Bitcoin options expiring, approximately one million Ethereum options are also reaching expiration. These Ethereum options exhibit a put/call ratio of 0.59, a max pain point set at $3,100, and a collective notional value of $3.6 billion, contributing to a total crypto options expiration notional value surpassing $10 billion.
Looking ahead, Greeks Live anticipates clearer Ethereum ETF developments in the early stages of the upcoming month, predicting downward pressure on implied volatility post the current delivery date.
The overall crypto market capitalization has shown a slight recovery from a recent decline, stabilizing around the $2.4 trillion mark. However, prevailing sentiment remains bearish, with markets experiencing a downward trend throughout June.
Bitcoin’s price rebounded to surpass $62,000 on June 28 but retreated slightly to $61,500 at the time of reporting, consolidating around this level following a dip below $60,000 on June 24. Similarly, Ethereum prices recovered from a five-week low of $3,260 earlier in the week, climbing back to $3,430 at the time of writing.
