Bitcoin Volatility Today: How Will Crypto Markets React When $3B BTC Options Expire

Around 27,300 Bitcoin options contracts will expire on Friday, July 4, and they have a notional value of roughly $3 billion.

This event is much smaller than last week’s end of month and end of the second quarter, so there is unlikely to be any impact on spot markets.

They have ticked up towards the end of the week as economic data from the US was favourable.

Bitcoin Options Expiry

This week’s tranche of Bitcoin options contracts has a put/call ratio of 1, meaning that the longs and the shorts are evenly matched. There is also a max pain point of $106,000, around $3,000 below current spot prices, which is where most losses will be made on contract expiry.

Open interest (OI), or the value or number of BTC options contracts yet to expire, is highest at the $115,000, $120,000, and $140,000 strike prices, with more than $1.5 billion at each level. However, OI at lower prices has decreased, suggesting more bullish sentiment among derivatives speculators.

“With macro quiet and volumes drifting lower, traders are gradually adding exposure” to Bitcoin futures, Deribit noted this week.

In its weekly market update , crypto derivatives provider Greeks Live said the group was showing “strong bearish sentiment with traders expressing frustration over stagnant market conditions and volatility remaining elevated.”

It added that key levels being watched include $92,000 as a major target; however, this was published before Bitcoin’s Thursday move above $109,500 (UTC+8).

In addition to today’s batch of Bitcoin options, there are around 220,000 Ethereum contracts that are also expiring, with a notional value of $584 million, a max pain point of $2,500, and a put/call ratio of 1.28. This brings Friday’s combined crypto options expiry notional value to around $3.6 billion.

Crypto Market Outlook

Total market capitalization has lost 2% over the past 24 hours, climbing to $3.64 trillion at the time of writing. However, markets have traded tightly around this range for the past couple of months.

Bitcoin spiked above $110,000 during late trading on Thursday (UTC+8) but had fallen back to $109,500 during the Friday morning Asian trading session (UTC+8).

The asset is now at the upper bound of its range-bound channel and just 2% away from a new all-time high. “Bitcoin just needs to stay above $108,890 for the rest of the week to position itself for a bullish weekly close above the final major resistance,” said analyst Rekt Capital.

Ethereum had reclaimed $2,600 on Thursday (UTC+8) and was trading just below that level on Friday morning (UTC+8). ETH has also struggled to gain much momentum over the past two months.