As a seasoned crypto investor with a few years under my belt, I’ve learned to keep an eye on options expiries as they can significantly impact the market. Today’s Bitcoin and Ethereum options expiry is no exception. With around $3.25 billion in notional value of contracts expiring for both Bitcoin and Ethereum, it’s essential to understand the implications for each asset.
Approximately $2.25 billion worth of cryptocurrency options contracts are set to expire on June 7. Among these contracts are around 18,000 Bitcoin options with a notional value of about $1.25 billion.
The upcoming crypto options expiry has less volume compared to the recent end-of-month contract expiration, suggesting a limited effect on the spot markets.
Bitcoin Options Expiry
In simple terms, the ratio of put contracts to call contracts for today’s Bitcoin transactions is 0.67. Approximately one-third more Bitcoin option contracts with buy (long) positions will expire than those with sell (short) positions. Furthermore, the price at which many investors are expected to incur losses, referred to as max pain point, is set at $70,000. At present, this price is slightly below the current Bitcoin spot prices, which stand around $71,000.
As a crypto investor, I’m keeping an eye on Deribit’s latest data, which indicates that approximately a billion dollars’ worth of contracts are open at the $75,000 strike price. These open contracts represent positions yet to be settled. On the bullish side, traders have their sights set on higher prices, with over $890 million in open interest at the $80,000 strike price and nearly a billion dollars at the $100,000 strike price.
As a crypto investor, I’ve noticed an uplifting shift in the market this week with the Bank of Canada and European Central Bank announcing interest rate cuts. The market seems to be responding positively, and the optimism is heightened by the successful launch of Bitcoin (BTC) and Ethereum (ETH) Exchange-Traded Funds (ETFs). Consequently, there’s a more hopeful outlook as macroeconomic news and market performance diverge significantly.
The text implies that the average volatility of Bitcoin’s major term is approximately 50%, while Ethereum’s is around 55%. Notably, both have decreased to more moderate levels based on Implied Volatility (IV), which is derived from expiring contracts.
On June 7th, BTC options worth approximately $1.25 billion with a put-call ratio of 0.67 and a max pain point of $70,000 expired. Simultaneously, ETH options totaling $1 billion in value and a put-call ratio of 0.64, along with a max pain point of $3,650, also reached their maturity dates. The Bank of Canada (BOC) announcement was also made around this time.
— Greeks.live (@GreeksLive) June 7, 2024
Ethereum Options Expiry
As a crypto investor, I’m keeping an eye on the upcoming options expirations in the market. Today marks the end of BTC contracts with undetermined outcomes. Meanwhile, Ethereum options totaling 260,000 contracts, worth approximately $1 billion, are set to expire. With a put/call ratio of 0.64, there’s a slightly larger demand for put options compared to call options. The max pain point for these Ethereum contracts is at $3,650, which is below the current spot price of $3,820. So, if the price of Ethereum doesn’t reach or exceed the max pain point by expiration, option holders with strikes near that level could experience significant losses.
As a researcher, I’ve noticed an intriguing correlation between the Bitcoin market volatility in this month and the macroeconomic news surrounding the Federal Reserve’s interest rate decisions. On the other hand, Ethereum’s price movements seem to be heavily influenced by announcements regarding ETF approvals.
As a researcher observing the crypto market, I note that the total capitalization remained unchanged at approximately $2.78 trillion at the moment of writing. However, a noteworthy increase of around 4% has been recorded over the last week. The majority of digital assets have shown minimal price fluctuations within the past day.
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2024-06-07 14:32