Nearly $1B Bitcoin Options Set to Expire, Will BTC Fall Further?

On July 7, around $880 million worth of Bitcoin option contracts with a notional value will expire. Crypto markets are in decline despite this volume being small compared to prior contract renewals.

Bitcoin Options Expiration

According to Greeks Live, around 29,000 Bitcoin option contracts will expire today. The maximum pain point for the Greeks Live is $30,000. This is very close to BTC’s current price.

Max Pain refers to the highest level of open contracts where the greatest losses will be experienced upon contract expiration.

The Put/Call Ratio for today’s contracts expiring is 0.76, which is slightly bullish and leaning toward neutral.

This metric divides not only the number long seller contracts but also the number short seller contracts. The ratios below 1 indicate that there are more long (call) contracts. This suggests bullish sentiment towards the asset.

Greeks Live, a derivatives trading feed, said that the cryptocurrency rally would not be sustainable.

Volatility has continued to increase this week. Despite several positive stimuli such as Hong Kong’s stable coin plan, the rally is not sustainable.

‘Short term buying on BTC or ETH is relatively cheap’, it stated before adding that ‘in the longer-term, a decrease in volatilty seems to be an inevitable trend.

Approximately 220,000 Ethereum option contracts will also expire today. These contracts have a $410 million notional value and a maximum pain point of $1875.

The put/call rate for ETH options stands at 0.48. This means that there are nearly twice as many calls as puts.

Glassnode, a platform for on-chain analytics, observed an increase in open interest (OI), or the number of Bitcoin options purchased. OI is the number of derivative contracts which have not yet been settled.

This suggests that market investors are increasing exposure to derivatives with defined risk.

Crypto Market Outlook

The crypto markets have been in decline for four days in a row. They are down another 1.5% today to $1.21 trillion.

BTC also fell below $30,000. This is the first time in this month that BTC has done so. It happened in the early morning hours of 7th July, when BTC fell to $2990.

Ethereum has suffered a much greater loss at the moment, after a 3% drop to $1.854 as of the writing.