Friday, July 26, marks a significant event in the crypto market as around 61,200 Bitcoin options contracts with a notional value of approximately $4.26 billion are set to expire. This expiry event is larger than usual due to the month-end timing. Despite the launch of spot Ethereum ETFs in the United States, the spot markets have experienced a loss of momentum this week.
The big batch of Bitcoin derivatives expiring today comes with a put/call ratio of 0.61, indicating that almost twice as many long contracts are expiring compared to shorts. Open interest at higher strike prices appears to favor the bulls, with $942 million at the $70,000 strike price and a staggering $1.3 billion at $100,000 strike price, according to Deribit. However, on the put side, there is around $500 million in open interest at the $60,000 strike price, signaling a potential level of support.
In addition to the Bitcoin contracts, there are around 500,000 Ethereum options contracts expiring on July 26 with a notional value of $1.76 billion. The put/call ratio on ETH contract expiries is 0.46, indicating more than twice as many long contracts expiring than shorts. The largest amount of open interest is seen at the $4,000 strike price with over $520 million, providing insights into the market sentiments and expectations for Ethereum’s price movements.
Combined Impact and Market Trends
The two batches of crypto options combined have a notional value of approximately $6 billion, making it one of the largest expiry events in the crypto market this year. Despite the launch of spot Ethereum ETFs in the US, outflows were observed on July 25, with $152 million leaving the products overall. This trend was further exacerbated by a significant Grayscale exodus of $346 million.
Price Movements and Market Recovery
Spot markets have seen a decline of around $120 billion this week, with Bitcoin retracing to $64,000 on July 25. While there was a recovery from a low of $54,000 earlier in July, Bitcoin struggled to break through the $68,000 resistance level. However, it managed to reclaim $67,000 during the Asian trading session on Friday. On the other hand, Ethereum experienced a significant drop of 11% since the launch of spot ETFs, falling to $3,100 on July 25 before bouncing back to $3,250 during Asian trading on Friday.
The expiry of Bitcoin and Ethereum options contracts, along with the launch of spot ETFs, has brought a mix of market movements and sentiments. Traders and investors are closely monitoring the price actions and open interest levels to gauge the future direction of the crypto market in the coming days.
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