Potential Impact of Upcoming $3.8 Billion Crypto Options Settlement on Market's Forward Movement
It's Friday, June 6, and around 30,700 Bitcoin options contracts worth roughly $3.2 billion will expire. This week's event is relatively tame compared to the previous month's expiry, so the impact on spot markets should be minimal. The crypto markets have taken quite the beating, losing $150 billion in the past twelve hours.
Bitcoin Options Game
With the upcoming expiry, the put/call ratio stands at 0.76, indicating there are more long contracts expiring than shorts as sentiment cools. The max pain point, where most losses will be made on contract expiry, sits around $105,000, just over two grand above the current spot prices.
The open interest (OI), or the value of BTC options contracts yet to expire, peaks at the $115,000 strike price, boasting a hefty $1.7 billion. There's an additional $1.6 billion in OI at the $140,000 strike price, showing that bullish speculators remain hopeful.[1]
In a recent market update, crypto derivatives provider Greeks Live noted that traders are chiefly bearish, expecting a continued correction in Bitcoin, despite recent upward movements.[2] They're eyeing the $105 to $109K resistance level and mention that volatility remains low, posing challenges for options traders. Short call positions, particularly in the $108K to $109K range for June 7 expiry, are widespread as traders anticipate Bitcoin to remain under the resistance.[2]
"Most are steering clear of longing at current levels despite the temptation, with some anticipating a deeper flush before considering long positions," Greeks Live added.[2]
Ethereum: Not Far Behind
Around 241,000 Ethereum contracts will also expire today, with a notional value of $624 million, a max pain point of $2,600, and a put/call ratio of 0.69.[3] This brings Friday's combined crypto options expiry notional value up to around $3.8 billion.
Crypto Market's Rollercoaster Ride
Crypto markets have plummeted 5.5%, with total capitalization sinking to $3.3 trillion, the lowest it's been in nearly a month. Bitcoin led the losses with a 2.7% tumble to $101,000, followed by a slight recovery during the Friday morning Asian trading session. Bitcoin has now shed almost 9% from its all-time high, teetering on support levels in six figures.[3]
Ethereum lost its rhythm with a 7% drop from over $2,600 to around $2,400, where it was trading at publication time. The altcoins suffered more extensive losses, with larger declines for Dogecoin, Sui, and Shiba Inu.[3]
[1] Enrichment 1[2] Enrichment 2[3] Enrichment 3[4] Enrichment 4
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- Given the approaching expiry, the put/call ratio for Ethereum options stands at 0.69, showcasing more short contracts expiring than long ones.
- The max pain point for Ethereum options sits at $2,600, slightly above the current spot price.
- Despite the recent decline, crypto investors continue exploring opportunities in various areas of finance, including Investing in Altcoins and Bitcoin, and leveraging Crypto Trading strategies.
- Technology advancements in Blockchain and Finance sectors have sparked interest in Cryptocurrencies like Ethereum, making them ideal elements for innovative trading strategies.
(Source reference omitted for brevity)
