Bitcoin’s Future: The Impact of Today’s 25,000 Options Contracts Expiry

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• A total of 25,000 Bitcoin options contracts are set to expire, possibly adding fuel to the current market momentum.
• With the recent spot crypto market rally, derivatives traders could potentially increase their purchase of call contracts, anticipating further gains.

As the cryptocurrency market witnesses a significant event today—the expiry of 25,000 Bitcoin options contracts—industry observers are closely watching to see if this occurrence will boost the current market momentum. With Ripple’s recent court victory already stirring the waters, could these contracts’ expiration add to the surge?

A Closer Look at the Options Expiry

The Bitcoin options contracts due to expire carry a put/call ratio of 0.56, which is indicative of a bullish sentiment towards Bitcoin, as the number of long (call) contracts surpass short (put) contracts by almost double. This ratio, calculated by dividing the number of short-seller contracts by the number of long-seller contracts, signals increased optimism for Bitcoin’s prospects.

The majority of these contracts have a max pain point—the level at which the greatest losses will be incurred upon expiry—of $30,500. Despite Bitcoin hitting a new high for the year, market observers like Greeks Live indicate that many participants may not be reaping profits from this rally, citing below-average options positions and volumes.

Ripples Beyond Bitcoin

In addition to Bitcoin, 176,000 Ethereum options contracts, boasting a notional value of $355 million and a put/call ratio of 0.66, are also maturing today. These expiring contracts further underscore the potential for an impact on the overall market momentum.

Anticipating a Market Shift

According to Greeks Live, numerous “whales” in the cryptocurrency market had established large positions earlier this month, and are now

“waiting for a change in the market.”

However, the recent $80 billion spot crypto market rally might serve as the catalyst for this anticipated market shift.

This rally could encourage derivatives traders to acquire more call contracts, forecasting continued market momentum and potential price increases. As of this writing, total capitalization has already risen by 6.8%, touching $1.30 trillion. Nevertheless, the broader crypto market remains within its four-month sideways channel, with no long-term breakout in sight.