As we approach the end of the month, a staggering 107,000 Bitcoin options contracts are set to expire, with a total notional value reaching $6.6 billion. This end-of-month expiry event is expected to bring about heightened market volatility, contrasting usual end-of-week expiries. The put/call ratio for today’s significant tranche of BTC derivatives stands at 0.5, indicating that there are twice as many long (call) contracts expiring as shorts (puts).
The max pain point for Bitcoin options expiry is set at $57,000, which is $4,000 below current spot prices. Despite this, bulls continue to dominate the Bitcoin options markets, with over $340 million in open interest at higher strike prices of $70K, $75K, and $80K. The total open interest further escalates to $590 million at $90K and $770 million at the $100K strike price, according to Deribit.
In addition to the substantial Bitcoin options expiry, approximately a million Ethereum options are also set to expire today. These Ethereum options have a put/call ratio of 0.59, with a max pain point set at $3,100 and a notional value of $3.6 billion. This influx of expiring options pushes the total crypto options expiration notional value over $10 billion.
Total market capitalization within the cryptocurrency space has seen a slight recovery following a brief dip earlier in the week. Currently hovering around the $2.4 trillion mark, market sentiment remains relatively bearish, with markets experiencing a downtrend throughout June. Bitcoin managed to climb back above $62,000 on June 28, only to retrace to $61,500 at the time of writing, consolidating at this level after dipping below $60K on June 24. Similarly, Ethereum prices have rebounded from a five-week low of $3,260 on Monday, rising to $3,430 as of the latest update.
The expiration of a significant number of Bitcoin and Ethereum options contracts is likely to impact market volatility in the short term. Traders and investors should be prepared for potential price fluctuations as a result of these expiring derivatives, especially considering the overall bearish sentiment that has persisted throughout June.
