Ethereum
Will Today’s $6.6 Billion Bitcoin Options Expiration Send Markets Down?
This Friday, approximately 107,000 Bitcoin options contracts will expire, with a notional value of $6.6 billion.
Additionally, this is an end-of-month expiration event, which is much larger than usual weekend expirations so there may be a little volatility in the market.
Bitcoin Options Expiration
The current huge tranche of BTC derivatives has a put/call ratio of 0.5, meaning that twice as many long (call) contracts expire as short (puts). The maximum pain point, or price at which most losses will be incurred, is $57,000, about $4,000 below current spot prices.
Bulls remain in charge of Bitcoin options markets with over $340 million in open interest at higher strike prices of $70,000, $75,000, and $80,000. Additionally, total OI reaches $590 million at $90,000 and $770 million at the $100,000 strike price, according to in Déribit.
Crypto derivatives tool provider Greeks Live said June was a tough month for the crypto market, “with a more pessimistic mood as BTC and ETH prices at one point approached the maximum pain point, which investors thought was unreachable.”
He added that despite the market volatility, implied volatility, a measure of future volatility of expiring contracts, did not show a significant increase, with BTC below 50% IV for all major terms.
In addition to the Bitcoin options jackpot, about a million Ethereum options are expiring today. These have a put/call ratio of 0.59, a maximum pain point of $3,100, and a notional value of $3.6 billion. This brought the total expiring notional value of crypto options to over $10 billion.
Ethereum ETF News will be clearer early next month, observed Greeks Live, which added that implied volatility “will be under strong downward pressure for a few days after today’s delivery.”
Impact on the cryptocurrency market
Total market capitalization has recovered somewhat from its decline earlier this week to hover around the $2.4 trillion mark. However, sentiment remains bearish and markets have been trending lower throughout June.
Bitcoin recovered to reach $62,000 on June 28, but has retreated to $61,500 at the time of writing. The asset seems to be consolidating at this level following its falls below $60,000 on June 24.
Ethereum prices also recovered on Monday after hitting a five-week low of $3,260. The asset was back at $3,430 at the time of writing.