As an experienced market analyst with a background in cryptocurrencies and derivatives, I have closely monitored the recent price action of Bitcoin (BTC) and the associated options expiry today. The weekly high of $65,500 was a significant achievement for BTC, but the subsequent 1% drop to around $64,000 indicates partial retracement.
As a researcher studying the cryptocurrency market, I’ve observed that Bitcoin reached its peak price of $65,500 last week. However, in the past 24 hours, it has experienced a slight dip, losing approximately 1%, and is now being traded around $64,000. The attention of traders is focused on the weekly Bitcoin options expiry taking place today.
According to Greeks.Live’s latest data, approximately 21,000 Bitcoin options are due to expire today with a put-call ratio of 1.2, implying a notional value of around $1.2 billion, and a maximum potential loss point at $62,000. The cryptocurrency market has seen significant gains this week, fueled by several positive news events. All major implied volatilities (IVs) have surged by 5% or more compared to the previous week.
On July 19th, BTC options worth approximately 21,000 units expired with a put-call ratio of 1.2, implying a greater demand for put (sell) options than call (buy) options. The max pain point for these options was set at $62,000, and their total notional value amounted to about $1.3 billion. Simultaneously, ETH options for around 140,000 units expired, featuring a put-call ratio of 0.39, suggesting more call options were purchased than put options. The max pain point for these ETH options stood at $3,150, and their notional value was approximately $480 million. The crypto market witnessed the maturation of these option contracts during this period.
— Greeks.live (@GreeksLive) July 19, 2024
When the number of put options traded relative to call options exceeds 0.7 or surpasses 1, it signifies that equity traders are buying more put contracts than call contracts. This observation implies increasing bearishness among market participants. Some investors may be betting on a market downturn, while others might be protecting their portfolios from potential losses during a sell-off.
The near-term outlook for Bitcoin isn’t particularly enticing, as there’s still a possibility that its price could decrease and reach up to $60,000 before correcting.
Bitcoin Retail Investor Demand at 3-Year Low
In a recent post on the X platform, Ki Young Ju of Cryptoquant revealed that the demand for Bitcoin among retail investors has reached a three-year low. Additionally, he mentioned that the average monthly fluctuation in this demand has fallen below 15% over the past month. According to Ju’s explanation, this decline is indicated by the decrease in total transfer volume for transactions under $10,000 during the previous 30 days.
#Bitcoin retail investor demand is at a 3-year low.
It’s measured by the 30-day change in total transfer volume for transactions under $10K.
h/t @AxelAdlerJr
— Ki Young Ju (@ki_young_ju) July 18, 2024
Institutions typically manage large Bitcoin transactions, but some market analysts argue that a substantial increase in retail investor participation is necessary for a significant price rally to occur. As explained by CryptoQuant contributor Minkyu Woo, “The true bull market often commences when there’s a huge influx of retail buying,” implying that increased retail investor activity tends to boost market confidence.
According to Santiment, the optimistic chatter about Bitcoin has noticeably decreased even as the mid-sized crypto market exhibits a rebound. A significant number of traders, particularly on Binance, are currently placing bets for a further decrease in Bitcoin’s value by opening short positions. The interplay of these factors increases the probability of a cryptocurrency price surge.
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2024-07-19 18:54