Can markets recover as $2 billion in crypto options contracts expire today?

On Friday, July 12, there will be about 23,700 Bitcoin options contracts with a theoretical value of about $1.49 billion.

The option expiration event is similar in magnitude to last week’s event, which did not have much of an impact on the spot markets.

They have been trending down due to BTC selling pressure from miners, the German government, and redemptions from Mt. enjoy

Expiration of Bitcoin Options

Today’s batch of BTC derivatives has a put/call ratio of 1.08, meaning the longs and shorts are very evenly distributed, and the bulls and bears are evenly matched. The point where most losses will occur, or peak pain point, is $58,500, slightly higher than current spot prices.

However, there is still about $800 million in open interest, or contracts yet to expire, at the $100,000 strike price, according to Deribit. There is also plenty of OI at strike prices above $65,000, so derivatives traders remain bullish.

Crypto derivatives tools provider Greeks Live commented that crypto markets have “recovered modestly” this week, with implied volatility of all major terms “retreating sharply to new lows since March” .

Implied Volatility (IV) is a measure of the volatility derived from crypto derivative contracts that expire in the future.

“Quarterly delivery overlaid with high volatility created a pretty perfect entry point for sellers, and option sellers increased their positions a lot this week, which served as the impetus to depress the major IVs of deadline,” he added.

Options data for July 12
24,000 BTC options are about to expire with a Put Call ratio of 1.08, a Maxpain point of $58,500 and a notional value of $1.4 billion.
157,000 ETH options will expire with a Put Call ratio of 0.37, a Maxpain point of $3,100 and a notional value of $490… pic.twitter.com/rLvHLTPkrj

— Greeks.live (@GreeksLive) July 12, 2024

In addition to the current Bitcoin options, there are 157,000 Ethereum options expiring with a theoretical value of $490 million. These have a put/call ratio of 0.37 and a maximum pain point of $3,100.

Crypto market outlook

Market sentiment is not upbeat, Greeks Live observed. Total crypto capitalization has fallen slightly over the past 24 hours to $2.22 trillion, remaining at levels not seen since late February before the rally.

Bitcoin has failed to gain momentum above $58,000 and fell below $57,000 during Asian trade on Friday before recovering slightly.

Ethereum attempted a shot at $3,200 but failed to get there and had fallen below $3,100 at the time of writing.

“With US stocks weaker today as well, the entire risk asset market is counting on a rate cut in September to come to the rescue,” commented Greeks Live.

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