Bitcoin Options Expiry Update
As of now, there are approximately 37,000 Bitcoin options contracts set to expire, with a total notional value of about $2.4 billion. While this expiration event is smaller compared to last week’s end-of-the-month event, it is slightly larger than the average expiry we have seen recently.
- The put/call ratio for today’s expiring BTC derivatives stands at 0.58, indicating that there are nearly twice as many long or call contracts expiring as shorts or puts.
- The max pain threshold, where most losses are expected, is at $66,000, which is above the current spot prices.
- Open interest remains high, particularly at the $70,000 strike price, with $846 million in OI sitting there, according to Deribit.
Crypto Derivatives and Market Observations
Market observers have noted that Ethereum ETFs have not performed as expected, leading to a weaker market sentiment this week. Despite this, there have been some positive developments, with significant declines in the major term implied volatility and Deribit’s Bitcoin volatility index (DVOL) dropping nearly 15% from 62% to 48% since the last monthly delivery in July.
In addition to the Bitcoin options expiring today, there are approximately 180,000 Ethereum options set to expire with a notional value of $600 million. This brings the total value of crypto derivatives set to expire to $3 billion, with Ethereum contracts having a put/call ratio of 0.55 and a max pain point of $3,300.
Impact on the Crypto Market
This week, the total crypto market capitalization has experienced a 4.8% decline, dropping to $2.41 trillion by Friday. Bitcoin prices have retreated from their recent high of $70,000 on July 29, falling 8% to trade at $64,250 during the Friday morning Asian trading session. Although the asset briefly dipped to an intraday low of $62,400 on August 1, it has since recovered slightly.
- Ethereum has also witnessed a 7% decline since the start of the week, trading at $3,155 on Friday morning in Asia. Despite this, spot ETF flows for Ethereum returned to positive levels on August 1, with an aggregate inflow of $26.7 million.
Market Outlook and Analyst Predictions
Greeks Live, a crypto derivatives provider, has expressed concerns about the current market outlook for the remainder of the month. With underperforming US stocks and a lack of positive catalysts, the market may need to wait for another month or two for a significant upturn.
Looking ahead, some crypto analysts have set their sights on September as the potential month for a market rebound. With ongoing developments and market trends, September could be a period of renewed optimism in the crypto space.
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