Markets
Will today’s $6.6 billion Bitcoin options expiration cause markets to fall again?
This Friday, approximately 107,000 Bitcoin options contracts will expire, with a notional value of $6.6 billion.
Also, this is an end-of-month expiration event, which is much larger than usual. weekend deadlines so there may be some market volatility.
Bitcoin Options Expiration
Today’s huge tranche of BTC derivatives has a put/call ratio of 0.5, meaning twice as many long (call) contracts expire as short (put) ones. The maximum tipping point, or the price at which most losses will be made, is $57,000, which is about $4,000 lower than current spot prices.
Bulls remain in command of the 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 rises to $590 million at $90,000 and $770 million at the $100,000 strike price, second to Derive.
Crypto derivatives provider Greeks Live commented that June was a difficult month for the cryptocurrency market, “with a more pessimistic atmosphere as BTC and ETH prices at one point approached the point of maximum pain, which investors thought was impossible to achieve.”
He added that despite the market volatility, implied volatility, a measure of the future volatility of expiring contracts, has not shown a significant increase, with BTC below 50% IV for all major terms.
In addition to the large batch of Bitcoin options, approximately one million Ethereum options expire 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 pushed the total notional expiration value of crypto options to over $10 billion.
Ethereum ETF News will be clearer early next month, Greeks Live noted, adding that implied volatility “will be under strong downside 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, settling around $2.4 trillion. However, sentiment remains bearish and markets have been in a downtrend throughout June.
Bitcoin recovered to above $62,000 on June 28, but has fallen to $61,500 at the time of writing. The asset seems to consolidate at this level after its drop below $60,000 on June 24th.
Ethereum prices had also recovered from their five-week low of $3,260 on Monday. The asset was back at $3,430 at the time of writing.