Bitcoin and Ether Options Expiry Looms, What’s Next for Crypto?

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As an experienced analyst, I believe that the recent crypto market downturn, with Bitcoin plummeting below $55,000 and Ethereum facing selling pressure, is a cause for concern. The upcoming expiration of significant options contracts on Deribit for both Bitcoin and Ethereum can put additional pressure on an already fragile situation. With the put-call ratios for both indicating more call options than put options, it suggests that market sentiment remains bullish, but the recent surge in put volumes indicates growing concerns among traders.

The cryptocurrency market is currently experiencing a significant downturn. Bitcoins price has dropped dramatically to hit $53,400 – a level last reached in February. This broad decline over the past two days has resulted in a loss of approximately 13% of the total global market capitalization for crypto, equating to over $250 billion. The upcoming expiration of Bitcoin and Ethereum options contracts may add further stress to an already precarious situation.

Bitcoin experienced a dip and currently hovers below the significant $55,000 mark. If it doesn’t regain strength, there’s a possibility for a slide down to the $52,000 support.

As we approach the expiration of approximately 18,300 Bitcoin options on Deribit, worth a collective $1 billion, the market prepares for this significant event. The put-call ratio currently hovers around 0.65. This figure reflects market sentiment as it indicates that more call options (bets on price rises) than put options (bets on price drops) have been purchased. The maximum pain point, or the price at which option holders experience the greatest financial loss, has shifted downward from $63,500 to $61,500.

As a researcher analyzing market trends, I’ve discovered that the put volume amounted to 19,552 during the past 24 hours, whereas call volume stood at 22,088 within the same timeframe. Consequently, the put-call ratio has shifted to 0.88.

At present, Ethereum encounters significant selling pressure with its price hovering around $2,830. Additionally, approximately $472 million worth of ETH options are scheduled to expire. The put-call ratio for these options is 0.35, and the max pain price is set at $3,350. Over the past day, there has been a surge in put volume totaling 98,643, compared to call volume of 126,788, resulting in a 0.78 put-call ratio.

The latest data from CoinGlass indicates that the current market turmoil has led to approximately $637 million in crypto assets being liquidated. Among this total, around $540 million were long positions, while short positions accounted for around $97 million. Notably, several prominent altcoins such as Solana (SOL), Dogecoin (DOGE), Binance Coin (BNB), Ripple (XRP), PEPE, PEOPLE, and NOT have experienced substantial liquidations as well.

What’s Next?

It’s believed that the decrease in value is caused by Mt. Gox making large repayments totaling around $2.97 billion in Bitcoin and Bitcoin Cash. As reported by Arkham, they transferred 47,229 BTC today.

Expert Jacob King, known for his financial analysis, drew attention to the significant selling activity observed in certain wallets based on on-chain data. He anticipates that a large portion of the $8.2 billion in Bitcoin earmarked for distribution to creditors will be offloaded. King cautioned his audience about an imminent bear market, remarking that the current low demand could facilitate this downturn.

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2024-07-05 15:24