Ethereum bulls and bears fight to win this week’s $2.8B ETH options expiry

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$8.1B in Bitcoin options expire this month — Do bulls or bears have the upper hand?

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Will this week’s $8.1 billion Bitcoin options expiry fuel a rally to $70,000 or should traders anticipate a correction?

Bitcoin (BTC) is about to experience its second-largest monthly options expiry of 2024, totaling $8.1 billion in aggregate exposure. The question is: will this be enough to fuel a robust rally toward $70,000, or are the bearish incentives too strong to ignore?

The current Macroeconomic environment favors risk-on assets, including Bitcoin and the Sept. 27 options expiry will be a pivotal event. The neutral-to-bullish options holders are well-positioned to capitalize if Bitcoin stays above $63,000. However, bears have enough motivation to curb this advantage by pushing Bitcoin’s price below $60,000. Thus, analyzing the options market's positioning and the potential net impact of the monthly expiry is crucial.

On Sept. 24, the Chinese stock market surged following the People's Bank of China’s (PBOC) announcement of plans to lower borrowing costs and inject liquidity into the economy, including reduced mortgage repayment programs. Additionally, the PBOC pledged $113.8 billion to support the stock market, including measures for share purchases and buybacks. Lynn Song, chief economist for Greater China at ING, commented, “There is still room for further easing in the months ahead,” according to Yahoo Finance.

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Call

Bitcoin derivatives show traders’ morale is low, weakening the odds of a 20% rise from the $49,320 BTC bottom.

Bitcoin (BTC) price crashed 19% on Aug. 5, reaching its lowest level in almost six months at $49,320. The sell-off caused the Bitcoin futures premium, considered the best proxy for derivatives traders’ optimism, to hit its lowest levels in three months. Traders are now debating whether Bitcoin prices below $53,000 represent a golden opportunity or if the risk of another drop below $47,000 is too high.

To gauge the impact of the recent price crash, one should begin by analyzing the Bitcoin futures markets. Unlike perpetual contracts, which typically settle every eight hours, BTC monthly futures carry an embedded cost due to their longer settlement period. Sellers generally demand a 5% to 10% annualized premium relative to regular Bitcoin spot markets to compensate for this issue. In summary, premiums below 5% signal pessimism.

The annualized Bitcoin futures premium (basis rate) fell to 5.5% on Aug. 5, its lowest level in three months, a sharp drop from the previous week when the indicator peaked at 12%. More notably, when the futures premium bottomed at 5% on May 2, it followed a 15% weekly Bitcoin price decline from $66,600 to $56,200. In May, Bitcoin’s price rebounded by 13% in the three days following the crash, but the current situation differs significantly.

Bitcoin price crumbles to $62K support, but derivatives metrics show bullish signs

August 1, 2024 Coin Telegraph

Bitcoin price crumbles to K support, but derivatives metrics show bullish signs

Bears

Bitcoin’s price continues to correct, but BTC options markets reflect traders’ interest in the $62,000 level.

Bitcoin (BTC) price plunged 5.5% between July 31 and Aug. 1, reaching its lowest level in over two weeks at $62,498. This movement has been attributed to reduced expectations of interest rate cuts in the United States and the distribution of 47,000 BTC from the estate of defunct exchange Mt. Gox. Traders fear that Bitcoin’s price could further correct to retest the $57,000 support level, but derivatives markets show resilience and no signs of stress.

On July 31, the United States Federal Open Market Committee announced its decision to leave interest rates unchanged at 5.25%, aligning with market expectations. Fed Chair Jerome Powell cited solid signs of gross domestic product expansion and confidence in the current rate of inflation reduction, potentially supporting a rate cut in September. In short, Powell’s statement suggests a more cautious approach to rate cuts.

Investors increased their bets in US Treasurys, causing the five-year yield to reach its lowest level in six months. Part of this movement can be explained by escalating tensions in the Middle East, leading traders to seek protection in the asset deemed safest. Another confirmation of this theory comes from the precious metal gold, as its price increased to $2,450, just 1.5% below its all-time high.

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Will Bitcoin bulls or bears benefit from this week’s $9.25B BTC options expiry?

June 26, 2024 Coin Telegraph

Bear

The Bitcoin halving hype has long passed, and this month’s massive options expiry provides insight into the future of the current BTC bull market.

A total of $9.25 billion in Bitcoin (BTC) options is set to expire on the morning of June 28. June’s monthly expiry is especially important given that it marks the end of the first half of 2024 and historically is the second largest expiry in every market, including the traditional finance industry. Investors are especially concerned after the $3 trillion tech giant NVidia traded down 12% since its all-time high on June 20.

It has been two months since the Bitcoin halving, which likely explains why 57% of the bullish bets have been placed at $70,000 or higher. But, in reality, the market displayed weakness in the past two weeks, making those call (buy) options essentially worthless. If Bitcoin remains near $61,500 on June 28 at 8:00 am UTC, the rights to buy BTC at $62,000 and $64,000 will not take part in the expiry. Similarly, put (sell) options at $58,000 and $60,000 are rendered null.

Bitcoin bulls have weak macroeconomic data on their side, which favors a more aggressive rate cut and monetary stimulus campaigns from the United States Federal Reserve and Department of Treasury. Sales of new U.S. single-family homes dropped to a six-month low in May, down 11.3% from the prior year. More concerningly, at the current sales pace, it would take 9.3 months to clear the new houses supply, up from 8.1 months in April.

Bitcoin derivatives turn bearish as traders anticipate sub $60K BTC price

June 24, 2024 Coin Telegraph

Bitcoin derivatives turn bearish as traders anticipate sub K BTC price

AMD

Bitcoin derivatives data suggests that macroeconomic and crypto-specific factors are behind BTC’s recent drop below $60,000.

Bitcoin (BTC) price dropped 5.8% between June 23 and June 24, reaching its lowest level in seven weeks at $59,700. Despite a modest recovery to $60,400, a total of $153 million in leveraged long BTC futures was forcefully liquidated due to insufficient margin. This movement caused derivatives metrics to shift to a neutral sentiment, ending a bullish trend that had lasted five weeks.

Traders are now questioning whether the worsening crypto market conditions indicate a longer bear market or a momentary panic due to miners being forced to cover expenses amid lower profitability and the potential sale of large stashes by known entities. Should traders wait for a dip to $57,500 or increase their positions during this period of fear, uncertainty, and doubt?

Some analysts raised concerns after the failed exchange Mt. Gox bankruptcy estate announced the imminent repayment in Bitcoin. Anonymous influencer fejau stressed that the disbursement announcement could have been anticipated by insiders, which explains the recent price weakness. However, fejau is puzzled by Bitcoin’s performance given the constructive macroeconomic scenario.

Why are top Bitcoin traders bullish despite BTC price dip to $64.3K?

June 18, 2024 Coin Telegraph

Call

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