Can Crypto Markets Recover When $2.4B Bitcoin Options Expire Today? 

Friday, August 2, will see around 37,000 Bitcoin options contracts expire with a notional value of around $2.4 billion.

The options expiry event is smaller than last week’s end-of-the-month event but a little larger than the average expiry.

Bitcoin Options Expiry

Today’s tranche of expiring BTC derivatives has a put/call ratio of 0.58, which means there are almost twice as many long or call contracts expiring as shorts or puts. The max pain, or point at which most losses will be made, is at $66,000 which is higher than current spot prices.

Open interest, or the value or number of contracts yet to expire, is still very high at the $70,000 strike price where $846 million in OI sits, according to Deribit.

Crypto derivatives provider Greeks Live noted that the markets have been weaker this week, with Ethereum ETFs underwhelming.

However, “a number of important events settled down smoothly” is added in reference to the major term implied volatility, which is “seeing significant declines.”

Deribit’s forward-looking Bitcoin volatility index (DVOL) has fallen nearly 15% from 62% to 48% since July’s monthly delivery, it added.

Aug. 2 Options Data
37,000 BTC options are expiring with a Put Call Ratio of 0.58, Maxpain point of $66,000 and notional value of $2.4 billion.
180,000 ETH options are expiring with a Put Call Ratio of 0.55, Maxpain point of $3,300 and notional value of $600 million.
The crypto… pic.twitter.com/rm38CEf4kj

— Greeks.live (@GreeksLive) August 2, 2024

In addition to today’s Bitcoin options expiry, there are around 180,000 Ethereum options expiring with a notional value of $600 million, taking the total crypto derivatives value to $3 billion.

The ETH contracts have a put/call ratio of 0.55 and a max pain point of $3,300.

Crypto Market Impact

Total crypto market capitalization has sunk 4.8% this week in a fall to $2.41 trillion by Friday.

Bitcoin prices have been in retreat since touching $70,000 on July 29 and have fallen 8% since then to trade at $64,250 during the Friday morning Asian trading session. The asset hit an intraday low of $62,400 on August 1 but has recovered a little.

Ethereum is also weakening with a fall of 7% since Monday to trade at $3,155 on Friday morning in Asia. Nevertheless, spot ETF flows for the asset had returned to positive levels on August 1 with an aggregate inflow of $26.7 million.

Greeks Live concluded that the outlook for the rest of the month wasn’t positive.

“US stocks have been underperforming recently, and there is not positive enough to support the market in August yet, the market may have to wait for another month or two.”

Moreover, crypto analysts have eyed September as the month for a market rebound.