On Friday, July 26, the crypto market will experience a significant impact due to the expiration of around 61,200 Bitcoin options contracts with a total value of $4.26 billion. This expiry event is larger than usual because it marks the end of the month.
The put/call ratio for the Bitcoin derivatives is 0.61, indicating that there are almost double the number of expiring long contracts compared to shorts. Open interest at higher strike prices appears to favor the bulls, with $942 million at $70,000 and a massive $1.3 billion at a $100,000 strike price. On the put side, there is approximately $500 million in open interest at the $60,000 strike price.
In addition to the Bitcoin contracts, there are also about 500,000 Ethereum options contracts expiring on the same day, with a notional value of $1.76 billion. The put/call ratio for the ETH contracts is 0.46, indicating that there are more than double the number of expiring long contracts compared to shorts. The largest amount of open interest is at the $4,000 strike price, totaling over $520 million.
When combining the two batches of crypto options, the total notional value reaches around $6 billion, making it one of the largest expiry events of the year. Despite the launch of spot Ethereum ETFs in the United States for the first time, spot markets have lost momentum this week.
The crypto market has seen a decline of approximately $120 billion this week, with Bitcoin dropping to $64,000 on July 25. While Bitcoin failed to break through resistance at $68,000 earlier in the week, it managed to reclaim $67,000 during the Asian trading session on Friday. Ethereum, on the other hand, has experienced a more significant decline, falling 11% since the launch of spot ETFs and reaching $3,100 on July 25 before recovering to $3,250 during Asian trading on Friday.
In addition to the market movements, Ethereum ETFs have seen outflows, with $152 million leaving the products on July 25. This has been influenced by a significant Grayscale exodus of $346 million, despite BlackRock and Fidelity receiving inflows of over $100 million between them.
Overall, the impact of the $4.3 billion Bitcoin options expiry on the crypto markets is significant, with both Bitcoin and Ethereum experiencing fluctuations in price and market sentiment. As investors navigate these developments, the market remains dynamic and influenced by various factors.