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Expiration of $ 930 million bitcoin options could set the market in motion


The large expiration of options and the unstable situation in the global financial markets will provoke the growth of bitcoin volatility and will help to get it out of the range of the last month.

Bitcoin managed to rise from last week’s lows and gain a foothold above the $ 9,600 mark. However, the first cryptocurrency is still locked in the range and the longer investors wait for a breakthrough above $ 10,000. The worse the short-term prospects. According to Econometrics analysts, Bitcoin CME futures indicate market fatigue. This is confirmed by a decrease in trading volumes and open interest.

According to the cryptocurrency company Skew on Friday last week, the registered trading volume on the Chicago Mercantile Exchange reached $ 195 million, which is almost 80% lower than the values ​​a month ago. Open interest also fell by 26%.

Paradigm shift

On the options market, everything is different. Since May 1, the volume of options trading on the site has grown by 3000% and reached $ 417 million as of Friday. In other words, institutional people do not leave the market, but simply change tools.

options Options expiring on Friday June 26th. Source: Skew

Given that $ 930 million worth of bitcoin options expire on June 26, the market may move. This event can disrupt the bored volatility and provoke large-scale price fluctuations in the digital asset market. If traders do not transfer open positions from July to September, we will fall.

Traders bet on growth

According to the analytical portal Skew over the past two months, open interest in bitcoin has doubled to $ 1.3 billion. Most cryptocurrency derivative positions are open on the Panamanian Deribit site. It accounts for 77% of the total market, although regulated exchanges, including CME and LedgerX are also gaining momentum recently.

Positions were distributed relatively evenly between bulls and bears. Although the strike price for most bitcoin contracts on CME is higher than the current price. while 75% of the options set the price at $ 11,000 and higher.

skew Strike price distribution. Source: Skew

Macroeconomics in the spotlight

In addition to the upcoming expiration of bitcoin options, cryptocurrencies are affected by the general situation of financial markets. Global stock markets are volatile due to a new wave of coronavirus in Europe, the USA and China. Investors have to evaluate the economic consequences of an untreated pandemic.

According to Chris Thomas head of digital assets at Swissquote Bank, stock sales could be a key catalyst for the market in the next few weeks.

“If the markets react very negatively to the increasing incidence of Covid-19, a panic will begin that will pull bitcoin down.”

Meanwhile, despite the growing interest in Bitcoin options, most cryptocurrency holders see it as digital gold and as a tool for long-term investments.

More and more people are interested in bitcoin and the volume of supply on the market decreased after May halving. Under these conditions, the transition of bitcoin from the category of investment assets to speculative can be an important source of liquidity.



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