This week, approximately 107,000 Bitcoin options contracts with a nominal value of $6.6 billion will expire. Additionally, this expiration event is larger than the usual weekend expirations, so there might be some market volatility.
Bitcoin options expiration
Today, there is a put/call ratio of 0.5 for a significant number of BTC derivatives, indicating that the number of bearish (put) contracts is twice as much as the bullish (call) contracts that will expire. The maximum pain point, which represents the price at which most losses occur, is $57,000, approximately $4,000 lower than the current spot price.
The bull market still dominates the Bitcoin options market, with over $340 million in open interest held at higher strike prices of $70,000, $75,000, and $80,000. Furthermore, according to Deribit’s data, the total open interest increased to $590 million at a $90,000 strike price and $770 million at a $100,000 strike price.
Greeks Live, a cryptocurrency derivatives provider, commented that June has been a challenging month for the cryptocurrency market. As Bitcoin and Ethereum prices approached their maximum pain points, the sentiment became more pessimistic, with investors believing that reaching those levels was impossible.
On June 28, 107,000 BTC options with a put-buy ratio of 0.5 and a maximum pain point of $57,000, with a nominal value of $6.6 billion, are set to expire. Additionally, 1.04 million ETH options with a sell-buy ratio of 0.59 and a maximum pain point of $3,100, with a nominal value of $3.6 billion, are also expiring. Today is… pic.twitter.com/sYVyb3HJnC – Greeks.live (@GreeksLive) June 28, 2024
It further states that despite the market volatility, the implied volatility (a measure of future volatility for expiring contracts) has not significantly increased, with all major BTC terms below 50% IV.
Apart from the significant number of Bitcoin options, there are also approximately 1 million Ethereum options expiring today. Their put/call ratio is 0.59, with a maximum pain point of $3,100 and a nominal value of $3.6 billion. This brings the total nominal value of expiring crypto options to over $10 billion.
Greeks Live observes that the Ethereum ETF news will become clearer early next month and adds that the implied volatility “will face strong downward pressure in the days following today’s delivery.”
Impact on the cryptocurrency market
The total market capitalization has slightly recovered from the earlier decline this week, hovering around $2.4 trillion. However, market sentiment remains bearish, with the market experiencing a continuous decline throughout June.
Bitcoin rose to $62,000 on June 28 but has since fallen to $61,500 at the time of writing this article. After dropping below $60,000 on June 24, the asset seems to be consolidating around this level.
On Monday, Ethereum’s price also rebounded from a five-week low of $3,260. At the time of writing this report, the asset has recovered to $3,430.