⚠️⚠️ Caution: $10 Billion $BTC and $ETH expiring on Friday⚠️⚠️
Be careful till then and get ready for Bullish Summer!
The upcoming $10 billion options expiry for Bitcoin and Ether on Friday, highlighted by Deribit's CEO Luuk Strijers, is expected to have significant implications for market volatility and trader sentiment.
1. Options Expiry Details: On Friday at 08:00 UTC, Bitcoin options worth $6.68 billion and Ether options worth $3.5 billion will expire on Deribit. This represents over 40% of the total notional options open interest on the platform, which currently stands at over $23 billion.
2. In-the-Money Contracts: More than 25% of these expiring options are expected to expire "in the money," meaning the strike price of the options is favorable compared to the current market price. This could lead to significant trading activity as holders decide whether to exercise their options or roll over their positions.
3. Impact on Market Volatility: Large quarterly expiries like this typically increase market volatility. Higher volatility can make prices more unpredictable due to increased trading volumes and the closing or rolling over of large positions.
4. Market Sentiment and Outlook: Despite recent price drops in Bitcoin (nearly 9% this month) and Ether (almost 10% down), there is anticipation among traders for a renewed bullish sentiment in the near term. This optimism is reflected in the options skew data, which shows higher premiums for near-term and long-term calls compared to puts.
5. Broader Market Factors: Factors contributing to recent price movements include miner sales, regulatory pressures, and upcoming events like the release of Mt. Gox coins in early July. These factors add complexity to predicting post-expiry market movements.
In summary, the $10 billion options expiry on Friday is poised to significantly influence Bitcoin and Ether markets, potentially triggering increased volatility and a shift in trader sentiment towards a more bullish outlook for July.
