As approximately 107,000 Bitcoin options contracts are set to expire this Friday, the overall notional value of $6.6 billion brings the potential for increased market volatility. This end-of-month expiry event is significantly larger than typical end-of-week expirations. The put/call ratio of 0.5 indicates that there are twice as many long (call) contracts expiring as shorts (puts). The max pain point of $57,000, which is $4,000 lower than current spot prices, suggests where most losses could occur. Despite this, bullish sentiment prevails in Bitcoin options markets, with over $340 million in open interest at higher strike prices of $70K, $75K, and $80K. Furthermore, the total open interest climbs to $590 million at $90K and $770 million at the $100K strike price.
Ethereum Options Expirations
Simultaneously, around a million Ethereum options are also reaching expiration, adding to the overall potential market impact. With a put/call ratio of 0.59, a max pain point of $3,100, and a notional value of $3.6 billion, these expiring contracts contribute to the total crypto options expiration notional value surpassing $10 billion. The upcoming Ethereum ETF news will likely provide clarity early next month, influencing the implied volatility associated with these expiring contracts.
Market Trends and Sentiment
While the total cryptocurrency market capitalization has slightly recovered from a recent dip to approximately $2.4 trillion, prevailing sentiment remains bearish. Throughout June, markets have experienced a downward trend, with Bitcoin briefly surpassing $62,000 on June 28 before retreating to $61,500. Ethereum prices have also seen fluctuations, bouncing back from a five-week low of $3,260 to around $3,430. Despite these price movements, the assets appear to be consolidating at current levels, reflecting the ongoing market uncertainty.
The expiry of Bitcoin and Ethereum options contracts presents a significant event that could influence market volatility. Traders and investors need to closely monitor these expirations and their potential impact on prices and market sentiment. As the crypto market continues to evolve, comprehensive analysis and strategic decision-making will be essential to navigate the shifting landscape of digital asset trading.