Today, around 29,000 Bitcoin options contracts are set to expire, according to Greeks Live. The “max pain” point for these contracts is $30,000, which is close to the current trading price of BTC.
Bitcoin Options Expiring
“Max pain” refers to the price level at which the most losses will occur when the contracts expire.
The put/call ratio for the expiring contracts is 0.76, indicating a slightly bullish sentiment but leaning towards neutral.
This metric divides the number of contracts held by short sellers by the number of contracts held by long sellers. Ratios below one mean that there are more call (long) contracts, which indicates a positive outlook or optimism towards the asset being considered.
Greeks Live, a derivatives trading feed, stated that the recent crypto rally was not sustainable:
“The volatility continued to rise this week, and despite some positive factors like Hong Kong’s stable coin plans, the rally was clearly not sustainable.”
It further added, “Short-term buying of BTC and ETH is relatively inexpensive,” and mentioned, “while in the long term, a decrease in volatility appears to be an inevitable trend.”
You can learn more about crypto derivatives and perpetual futures contracts in cryptocurrency.
In addition, approximately 220,000 Ethereum options contracts with a notional value of $410 million are also set to expire today. The max pain point for these contracts is $1,875.
The put/call ratio for ETH options is 0.48, indicating that there are nearly twice as many call contracts as put contracts.
On July 5, the on-chain analytics platform Glassnode noticed an increase in open interest (OI) for Bitcoin options. Open interest represents the overall count of derivative contracts that have been created but are yet to be resolved or finalized.
“This suggests that market investors are actively seeking greater participation and exposure to derivative instruments that involve specific risks.”
Crypto Market Outlook
Crypto markets have been experiencing a decline for the past four days, with a further 1.5% drop today, bringing the total market value to $1.21 trillion.
Moreover, BTC has fallen below $30,000 for the first time this month. This happened in the early hours of July 7th when the price of BTC fell to $29,904.
Ethereum is currently facing more challenges, with a 3% slide down to $1,854 at the time of writing.
