On July 26, a significant number of Bitcoin options contracts are set to expire, totaling around 61,200 contracts with a notional value of approximately $4.26 billion. This expiry event is larger than usual due to it being the end of the month. Despite the recent excitement surrounding the launch of spot Ethereum ETFs in the United States, spot markets have experienced a loss of momentum this week.
The put/call ratio for the Bitcoin options expiry stands at 0.61, indicating that there are almost twice as many long contracts expiring as short contracts. Open interest at higher strike prices appears to favor the bulls, with $942 million at the $70,000 strike price and a significant $1.3 billion at the $100,000 strike price. Conversely, on the put side, there is approximately $500 million in open interest at the $60,000 strike price.
In addition to the Bitcoin contracts, there are also around 500,000 Ethereum options contracts expiring on July 26, with a notional value of $1.76 billion. The put/call ratio for the ETH contracts is 0.46, indicating that there are more than twice as many long contracts expiring compared to short contracts. The largest amount of open interest for Ethereum options is at the $4,000 strike price, with over $520 million.
The two batches of crypto options, when combined, have a notional value of approximately $6 billion, making it one of the largest expiry events of the year. Despite the launch of Ethereum ETFs, there were significant outflows of $152 million on July 25, with a larger exodus of $346 million from Grayscale products. This has contributed to the decline in spot markets by around $120 billion this week.
Bitcoin, after retracing to $64,000 on July 25, experienced difficulty breaking through resistance at $68,000 earlier in the week. However, it managed to reclaim $67,000 during the Asian trading session on Friday. Ethereum, on the other hand, has struggled, with a significant 11% decline since the launch of spot ETFs, dropping to $3,100 before recovering to $3,250 during Asian trading on Friday.
The expiry of Bitcoin and Ethereum options contracts, along with the market trends surrounding these events, have had a significant impact on the cryptocurrency market. The divergent performance of Bitcoin and Ethereum in response to the expiry events and ETF launches highlights the complex and dynamic nature of the digital asset market.
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