As a seasoned crypto investor with several years of experience in the market, I’ve grown accustomed to the rhythm and volatility that comes with options expiries, especially the larger ones like the upcoming one on July 26. With around $10.5 billion worth of Bitcoin and Ethereum options contracts expiring, this event is shaping up to be a significant one.
On July 26, there are anticipated to be approximately 61,200 Bitcoin options contracts with a total value of around $4.26 billion.
The options expiry event is larger than usual expiries because it is the end of the month.
Additionally, the pace of activity in spot markets slowed down this week despite the historic debut of Ethereum-backed ETFs in the US stock market.
Bitcoin Options Expiry
In simple terms, the large number of Bitcoin derivative contracts set to expire today shows a put-to-call ratio of 0.61. This indicates that around two times more long positions (bets on the price going up) than short positions (bets on the price going down) are concluding.
At Deribit, a significant amount of open interest is observed for options with higher strike prices, specifically $942 million at $70,000 and an impressive $1.3 billion at $100,000. This implies a bullish sentiment among traders.
On the put side, there is around $500 million in OI at the $60,000 strike price.
Approximately 500,000 Ethereum options contracts, in addition to the Bitcoin contracts, are set to expire on July 26. The combined worth of these contracts amounts to approximately $1.76 billion.
In simpler terms, for every two Ethereum ETF contracts set to expire, one is a call (buy) option and the other is a put (sell) option. The imbalance between these two stands at 0.46. Additionally, on Deribit, over $520 million is tied up in open positions for the Ethereum contracts with a strike price of $4,000.
With a combined estimated worth of approximately $6 billion, the two batches of crypto options represent one of the largest expiration events in the crypto market this year.
On July 25, Ethereum ETFs experienced a second consecutive day of outflows, with a total of $152 million being withdrawn. This trend was driven primarily by Grayscale’s large-scale withdrawal of $346 million, while BlackRock and Fidelity saw inflows exceeding $100 million collectively.
Crypto Market Impact
As a seasoned financial analyst with over a decade of experience in the markets, I’ve seen my fair share of market fluctuations. This week, I’ve noticed a significant decline in spot markets, amounting to approximately $120 billion. Bitcoin, in particular, took a hit and retreated back to $64,000 on July 25. The volatility we’re witnessing is not uncommon in the cryptocurrency world, but it can still be concerning for investors who are new to this space or have a significant amount of capital at stake. It’s crucial to remember that market swings are an inherent part of investing and should be anticipated rather than feared. My advice would be to keep a diversified portfolio and stay informed about the latest market trends and developments.
Although BTC had bounced back from its $54,000 low in early July, it wasn’t able to surpass the $68,000 resistance level earlier this week. Instead, it dropped again. However, during the Asian trading hours on Friday morning, BTC managed to regain the $67,000 mark.
Despite the successful launch of Ethereum-based spot Exchange Traded Funds (ETFs), Ethereum itself has underperformed significantly. Since its launch day, ETH has experienced a decline of approximately 11%, reaching a low of $3,100 on July 25. However, it managed to rebound slightly during Asian trading on Friday, recovering to around $3,250.
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2024-07-26 08:56