On July 14, the Bitcoin market is poised for a significant event as 25,000 Bitcoin options contracts expire with a notional value of $770,000. While this may not be deemed a substantial expiration event, it can contribute to the existing market momentum, which has already been influenced by Ripple’s activities and the performance of its associated digital asset, XRP.
The batch of Bitcoin options contracts about to expire reveals a put/call ratio 0.56. This ratio indicates approximately twice as many long (call) contracts as short (put) ones.
The 0.56 put-to-call ratio arises from the difference in open interest between the $470 million call options and the $250 million put options. However, the actual outcome is expected to be lower than the total open interest of $720 million due to overconfidence among bullish traders.
In addition to Bitcoin, today marks the expiry of 176,000 Ethereum options contracts, totaling $355 million in notional value, with a put/call ratio of 0.66. The max pain point for these ETH contracts is set at $1,900.
Greeks Live, a derivatives feed, noted that many whales are “waiting for a change in the market” after establishing significant positions earlier this month. Trading activities this week are primarily focused on adjusting positions rather than making substantial market moves. Greeks Live added:
“The current BTC call position is more than double the put position, and the ETH position is more than triple, so once the uptrend begins, the existing options pattern will be disrupted.”
The recent spot crypto market rally, with a value of $80 billion, may encourage derivatives traders to acquire more call contracts in anticipation of continued momentum and price gains.
As of now, the total capitalization of the crypto market has risen by 6.8% to reach $1.30 trillion. However, it’s important to note that the broader crypto market remains within a four-month sideways channel, with a long-term breakout yet to materialize.
The Battle For Bitcoin’s Trading Price
The ongoing debate centers around whether the bulls can support further gains and maintain Bitcoin’s trading price above $31,000 on July 14. The potential approval of a spot ETF is a key argument put forth by the bulls. However, recent comments from Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), have cast doubt on the likelihood of such approval.
Gensler expressed concerns about conflicting services offered by crypto exchanges and their limited risk monitoring practices, which make them vulnerable to market manipulation.
In light of the macroeconomic data supporting potential interest rate hikes and Gensler’s reservations about exchanges, bears may find an opportunity to break below the crucial $30,000 price support and secure a $120 million profit during the upcoming weekly options expiry.
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