This Friday, a significant number of Bitcoin options contracts, totaling around 107,000 with a notional value of $6.6 billion, are set to expire. This end-of-month expiry event is larger than usual, which could potentially result in some market volatility.
The current BTC derivatives have a put/call ratio of 0.5, indicating that there are twice as many long (call) contracts expiring as shorts (puts). The max pain point, where most losses are expected to occur, is $57,000, which is approximately $4,000 lower than the current spot prices.
Despite the upcoming expiry, bulls continue to dominate the Bitcoin options markets, with over $340 million in open interest at higher strike prices such as $70K, $75K, and $80K. Additionally, the total open interest increases to $590 million at $90K and $770 million at the $100K strike price, according to Deribit.
Greeks Live, a crypto derivatives tooling provider, noted that June has been a challenging month for the crypto market, with a more pessimistic atmosphere as BTC and ETH prices approached the max pain point, which was previously thought to be unattainable.
In addition to the Bitcoin options expiry, approximately a million Ethereum options are also set to expire, with a put/call ratio of 0.59, a max pain point of $3,100, and a notional value of $3.6 billion. This brings the total crypto options expiration notional value to over $10 billion.
Despite the volatility in the market, the implied volatility, which measures future volatility from expiring contracts, has not shown a significant increase, with BTC below 50% IV for all major terms. Furthermore, Ethereum ETF news is expected to provide more clarity early next month, which could impact the implied volatility in the market.
The total market capitalization has slightly recovered from its recent dip to hover around the $2.4 trillion mark. However, sentiment remains bearish, and the markets have been on a downtrend throughout June.
As of the most recent data, Bitcoin has recovered to surpass $62,000 on June 28, but has since pulled back to $61,500. The asset seems to be consolidating around this level after dropping below $60K on June 24. Ethereum prices have also rebounded from their five-week low of $3,260 on Monday, climbing back to $3,430.
In conclusion, the expiry of Bitcoin and Ethereum options, along with the overall market sentiment, will be closely monitored for potential impact on market stability and price movements in the coming days.