The crypto market is buzzing with new anticipation as Ripple secures a significant court victory and on the other hand 25,000 Bitcoin options contracts approach their expiry date. These events have the potential to influence all the momentum in the crypto market, while Ethereum’s surge to new highs adds further excitement. The traders are closely watching these developments, speculating on potential gains and making adjustments to their positions.
On July 14, 25,000 Bitcoin options contracts are set to expire, collectively representing a notional value of $770,000. While this expiry event may not be substantial in itself, it has the potential to contribute to the market momentum already generated by Ripple and its associated cryptocurrency, XRP.
Examining the expiring Bitcoin options contracts, the put/call ratio is currently at 0.56. This ratio indicates that there are approximately twice as many call contracts (representing long positions) as there are put contracts (representing short positions). Ratios below one generally suggest a higher number of call contracts, reflecting a bullish sentiment towards the underlying asset.
Today’s expiring options contracts have a maximum pain point of $30,500. The maximum pain price represents the level at which the highest number of open contracts exist and where the largest losses are anticipated upon expiry.
Greeks Live, a derivatives feed, noted that Bitcoin has recently reached a new high for the year. However, despite the rally, many market participants have not been able to profit from the upward movement. Options positions and volumes have been below average, indicating a relatively fragmented options market.
In addition to Bitcoin, 176,000 Ethereum options contracts are also set to expire on the same day. These contracts have a notional value of $355 million and a put/call ratio of 0.66. The maximum pain point for the ETH contracts is $1,900.
Greeks Live suggests that many large-scale traders are currently waiting for a potential market shift after establishing significant positions earlier in the month. The trading activities this week primarily focus on adjusting positions in preparation for potential market movements. Once the anticipated uptrend begins, the existing options pattern is likely to be disrupted, considering the current call-to-put ratios for both Bitcoin and Ethereum.
The recent $80 billion rally in the spot crypto market has caught the attention of derivatives traders, who may be inclined to purchase more call contracts in anticipation of further momentum and price gains. At the time of writing, the total crypto market capitalization has increased by 6.8% in a single day, reaching $1.30 trillion.
It is important to note that while the market shows signs of upward movement, the broader crypto market has been within a four-month sideways channel, with no significant long-term breakout observed thus far.
In summary, the expiry of 25,000 Bitcoin options contracts and Ripple’s recent court victory have the potential to impact the momentum in the crypto market. As Ethereum continues to reach new highs, traders are speculating on potential gains and making adjustments to their positions accordingly. The outcome of these events will determine whether the market experiences sustained breakout or consolidation within the sideways channel.
Traders and investors are closely monitoring the options expiry and the influence of Ripple’s victory, as these factors could shape the near-term market sentiment and potentially drive further price movements. The dynamic nature of the crypto market, coupled with ongoing regulatory developments, creates an environment of both excitement and caution for market participants.
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