As a seasoned analyst with over two decades of experience in the financial markets, I have witnessed countless derivatives expiries that have left both novice and veteran traders scratching their heads. However, today’s Bitcoin and Ethereum options expiry event is one that has caught my attention, not because of its potential impact on spot prices, but due to the lopsided put/call ratios and the staggering open interest at various strike prices.
As a researcher, I’m preparing to note that approximately 62,000 Bitcoin options contracts are set to expire on Friday, August 30th. The total theoretical value of these contracts stands at roughly $3.65 billion.
Today’s expiration event is quite significant because it occurs at the end of the month. Nevertheless, fluctuations in the spot markets are usually not triggered by such derivative developments. Instead, they act as a barometer, reflecting the general mood of the market.
Bitcoin Options Expiry
This week, the large number of Bitcoin options contracts is leaning heavily towards ‘long’ or ‘buy’ positions, with approximately twice as many call options set to expire compared to put options, representing a put/call ratio of 0.59.
The quantity of open agreements that have not yet been settled at the prices of $70,000 and $75,000 remains substantial, as indicated by Deribit’s data.
Furthermore, approximately 793 million dollars of Option Instrument (OI) is located at the $90,000 strike level, and another 987 million dollars remains at the $100,000 strike level.
Despite Nvidia surpassing Wall Street’s earnings expectations this week, Greek’s Live, a crypto derivatives provider, noted that the markets have followed a downward trend similar to Nvidia’s stock price.
Besides Bitcoin options expiring today, there are Ethereum contracts worth approximately $1.35 billion that are also set to expire. In total, there are 536,000 contracts, with a put/call ratio of 0.50. This means that the number of long positions is twice as high as the short positions. The Open Interest (OI) is particularly high at the $4,000 strike price, where there are $373 million in open contracts.
Greeks Live also acknowledged all of the Ethereum FUD that has infected the market.
As a crypto investor, I’ve noticed a lot of negativity surrounding ETH lately, and it’s true that its strength has been waning for some time now. The practical applications haven’t been as robust as we’d hoped, but I can’t help but feel that the market might be overly pessimistic about ETH. In fact, in the last two days, we’ve seen a significant drop in the value of Block options, which seems to suggest a shift in the market sentiment.
Crypto Market Outlook
This week, the overall value of cryptocurrencies has dropped by approximately $200 billion, causing the digital asset market to decrease by 1.5%. At present, the total worth of these markets is estimated to be around $2.17 trillion.
During the Asian trading hours on Friday, Bitcoin peaked at $61,000 before encountering strong resistance and subsequently dropping to around $59,000.
At the point of this writing, Ethereum prices were nearly touching $2,600, yet they failed to surpass the resistance level, instead dipping down to $2,525.
The altcoins were mixed but mostly flat on the day following a week or retreat.
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2024-08-30 08:56