Can Crypto Markets Recover As $2.4B Bitcoin Options Expires Today?

About 37,000 Bitcoin options contracts with a notional value of about $2.4 billion expire on Friday, August 2.

The option expiration event is smaller than last week’s month-end event, but slightly larger than the average expiration.

Expiration of Bitcoin Options

The current tranche of expiring BTC derivatives has a put/call ratio of 0.58, meaning there are almost twice as many expiring longs or calls as shorts or puts. The peak pain, or point at which most losses will occur, is $66,000, which is higher than current spot prices.

Open interest, or the value or number of contracts yet to expire, is still very high at the $70,000 strike price where there is $846 million in OI, according to Deribit.

Crypto derivatives provider Greeks Live noted that markets have been weaker this week, with Ethereum ETFs underperforming.

However, it adds “a number of major events that have resolved smoothly” in reference to the underlying’s implied volatility, which is “seeing significant declines.”

Deribit’s Futures Bitcoin Volatility Index (DVOL) has fallen nearly 15% from 62% to 48% since July’s monthly delivery, he added.

Options data from August 2
37,000 BTC options expire with a Put Call ratio of 0.58, a Maxpain point of $66,000, and a notional value of $2.4 billion.
180,000 ETH options expire with a Put Call ratio of 0.55, a Maxpain point of $3,300, and a notional value of $600 million.
The crypto… pic.twitter.com/rm38CEf4kj

— Greeks.live (@GreeksLive) August 2, 2024

In addition to the current expiration of Bitcoin options, there are about 180,000 Ethereum options expiring with a notional value of $600 million, bringing the total value of crypto derivatives to $3 billion.

ETH contracts have a put/call ratio of 0.55 and a maximum pain point of $3,300.

Impact of the crypto market

The total crypto market capitalization has sunk 4.8% this week in a fall to $2.41 trillion on Friday.

Bitcoin prices have been in retreat since hitting $70,000 on July 29 and have fallen 8% since then to trade at $64,250 during Friday morning’s Asian trading session. The asset hit an intraday low of $62,400 on August 1 but has recovered somewhat.

Ethereum is also weakening with a 7% drop since Monday to trade at $3,155 on Friday morning in Asia. However, spot ETF flows into the asset had returned to positive levels on August 1 with an aggregate inflow of $26.7 million.

Greeks Live concluded that the outlook for the rest of the month was not positive.

“US stocks have underperformed recently and there is still not enough upside to support the market in August, the market may have to wait another month or two.”

Additionally, crypto analysts consider September to be the month for a market rally.

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