Bitcoin Options Expiry: Will Markets Move?

Bitcoin Options Expiry Amid Market Uptick

Approximately 31,000 Bitcoin options contracts, with a notional value of around $1.9 billion, are set to expire on Friday, July 3. This expiration is significantly smaller than the substantial end-of-quarter event last week, suggesting a minimal impact on spot markets.

Crypto markets, which experienced a flat trend for most of the week, saw a resurgence on Friday. Since Monday, the sector has attracted $70 billion as losses from last month’s downturn have decelerated.

This week’s Bitcoin options contracts exhibit a put/call ratio of 0.7, indicating a slight dominance of sellers of long (call) contracts over sellers of short (put) contracts. The maximum pain point is situated near $61,000, close to current spot prices, meaning some contracts are likely to expire in the money.

Open interest (OI), representing the value or number of Bitcoin options contracts yet to expire, remains highest on Deribit at the $80,000 strike price, totaling $1.1 billion. However, short sellers maintain $900 million in OI at the $60,000 strike.

According to Coinglass, total BTC options OI across all exchanges has decreased to a 16-month low of $26 billion following last week’s significant expiry.

Derivatives provider Greeks Live noted this week that “Short-dated skew continues to account for the majority of downside premium embedded in BTC options pricing.” They added, “Options positioning remains primarily driven by near-term risk management rather than a broad repricing of longer-term expectations.”

Ethereum Contracts Also Expire

In addition to Bitcoin options, approximately 134,000 Ethereum contracts are expiring today, with a notional value of $228 million. These contracts have a maximum pain point of $1,650 and a put/call ratio of 1.3.

Total ETH options OI across all exchanges is currently low, standing at around $3.6 billion, its lowest level since January 2023. This brings the total notional value of crypto options expirations to approximately $1.8 billion.

Market Sees Broad Gains

Crypto markets are experiencing a broad rally this Friday, with total capitalization rising to $2.2 trillion.

Bitcoin led the gains, reaching an intraday high of $62,000 on Thursday following weaker-than-expected U.S. jobs data. It was trading at $61,500 on Friday morning in Asia. Ether performed slightly better, reclaiming the $1,700 level with a 6% daily gain and maintaining that momentum over the past 12 hours.

The upcoming long weekend in the United States is expected to lead to subdued market activity.

A recent social media post indicated that Bitcoin had reclaimed $62,000 after June jobs data came in below expectations, reducing the likelihood of a Federal Reserve rate hike. The post also stated that over $69 billion had been added to the crypto market in the preceding six hours, with Bitcoin up 3.5% and Ethereum also showing gains.