A slew of Bitcoin options contracts are set to expire today, but will they add to the market momentum already spurred by Ripple’s court victory? A large batch of Ethereum options contacts is also expected to expire as ETH crossed $2,000 for the first time in months.
On July 14, 25,000 bitcoin options contracts with a face value of $770,000 will expire. While this is not a major expiry event, it could add to the market momentum already driven by Ripple and XRP.
Bitcoin options expiration
The batch of bitcoin options that is about to expire has a buy/sell ratio of 0.56. This means that there are twice as many buy (long) contracts as there are sell (buy) contracts.
The ratio is derived by dividing the number of short seller contacts but the number of long seller contracts. Moreover, values less than one mean that there are more long contracts, which indicates an upward trend for the underlying asset.
The maximum pain point for expiring options contracts today is $30,500. Max Pain price indicates the level with the most open contracts and at which the most losses will be made at expiry.
Derivatives at Greeks Live noted that Bitcoin has hit a new high for the year. However, “judging by market sentiment, most participants do not seem to be benefiting from the rally.”
“Option positions and volumes have been well below average this week and the options market has been relatively fragmented.”
In addition, 176,000 Ethereum options contracts also expire today. It has a face value of $355 million and a sell/buy ratio of 0.66. The maximum pain point for ETH contracts is $1,900.
Market momentum changed
Greeks Live added that many whales are “waiting for a change in the market after opening a large position earlier this month.” She added that this week’s trading is more about adjusting positions.
“BTC’s current call position is more than a double put, and ETH is more than a triple put, so once the uptrend starts, the current options pattern will be disrupted.”
However, that change may have just happened with the $80 billion spot cryptocurrency market skyrocketing today.
This may motivate derivatives traders to buy more call contracts if they expect more momentum and price gains.
Total capitalization is up 6.8% on the day at $1.30 trillion at the time of writing.
However, the broader crypto market has been inside its sideways channel for four months, and there has been no long-term breakout yet.
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