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- Bitcoin (BTC) options contracts with a notional value of around $3.5 billion are set to expire today; however, the market is expected to remain calm.
- An analyst has predicted that Bitcoin could lose 70% of its value in the next bear run.
In our recent update, Bitcoin (BTC) was reported to be climbing up the price curve to recapture the $118k resistance level. While investors keenly monitored the market for the right entry point, something else was happening. According to market data, a staggering amount of 30,000 Bitcoin options contracts were set to expire today.
More About the Bitcoin Options Contracts
Delving deep into this, we found that the Bitcoin options contracts have a notional value of around $3.5 billion. Also, the current batch of Bitcoin options contracts has a put/call ratio of 1.2. Technically, this means more short-term contracts are expiring compared to long-term contracts. Reacting to this news, the BTC price has taken a nosedive from its daily high of $117.9k to its previous resistance level of $116.7k.
At the time of writing, Bitcoin had declined by 0.21% in the last 24 hours. Its daily trading volume had also declined by 36% with $42.8 billion changing hands. Bitcoin’s current movement aligns with our earlier discussion, which hinted that “August and September could bring seasonal weakness.”
Regardless of the market behavior, experts believe that this would have no serious impact on the market since this expiry amount is very close to the one recorded last week.
According to Coinglass data, Bitcoin futures Open Interest (OI) is currently at an all-time high level of around $86 billion. Apart from Bitcoin, data also suggests that 177,500 Ethereum (ETH) contracts are expiring. These have a notional value of $815 million and a put/call ratio of 1. In total, the notional value of the expiring crypto options is around $4.3 billion.
Crypto derivatives provider Greeks Live has also noted that the trading volume of various assets has declined, coupled with the substantial increase in volatility.
Recent actual volatility has also been substantial, showing a marked increase compared to last month, yet actual trading volume has declined instead; volatility levels and trading volume have diverged.
Multiple analysts have so far remained optimistic about a bullish rebound. One of them is BitMEX co-founder Arthur Hayes, who has projected the Bitcoin price to hit $250k by the end of the year, as noted in our earlier post. However, Cryptoverse founder Benjamin Cowen believes that this could be followed by a severe crash. According to him, the next bear run could see bitcoin falling to $75,000, representing a 70% fall.
Does it have to happen? No, but you know, history would at least caution us to at least believe that it might…If we start screaming higher in Q4 for me, it’ll just be simple like, all right, this time’s not different, I’ll just take profits back to stables.
Fascinatingly, a pullback in Bitcoin price is expected to affect Ethereum as happened in the past. For now, whales are reported to be moving billions into Ethereum staking while holding large BTC reserves, as highlighted in our recent coverage.
