As an experienced financial analyst, I closely monitor the Bitcoin and crypto markets, and I believe that the upcoming options expiry on April 26 could lead to significant downside price volatility for Bitcoin. With over $6.2 billion in notional value of Bitcoin options set to expire, and a put-call ratio of 0.68 indicating a rise in put options recently, the max pain point is at $61,000, which is below the current price. This means that there could be a large number of traders looking to sell their Bitcoin holdings or hedge against potential losses, leading to a pullback in price on expiry day.
Approximately $6.3 billion worth of Bitcoin options are set to expire on April 26, indicating a possible price drop for Bitcoin approaching the $61,000 mark due to potential downside volatility. Traders anticipate market recovery after this event, potentially halting profit-taking on bearish bets.
Bitcoin Price Recovery After Options Expiry?
Approximately 96,000 Bitcoin options with a total notional value of over $6.2 billion are due to expire on Deribit on April 26. The put-call ratio stands at 0.68, suggesting that the demand for put options has increased in recent days as the monthly expiration draws near. The price level that could cause the maximum potential loss or gain for these options is currently set at $61,000 per Bitcoin, which is below the current market price. As a result, significant volatility can be anticipated on the expiry day, with expectations of a pullback in the market price.
Additionally, approximately 990,000 Ethereum options with a total value of around $3.1 billion are approaching their expiration dates. The put-call ratio stands at 0.51. The max loss for option holders, or max pain point, is currently set at $3,100. At the moment, the price of Ethereum is trading above this mark and higher than its current value of $3,141.
As a data analyst, I’ve noticed that Deribit recently disclosed an uptick in “realized volatility” based on their Bitcoin Volatility Index (DVOL). This surge in volatility can be attributed to the approaching expiration dates for crypto options.
Expert “Greekslive” commented on the subdued crypto market this week, where low trading volumes resulted in Bitcoin and Ethereum prices approaching their support levels. This market instability caused a considerable decrease in implied volatility (IV) for all major terms, with Dvol dropping by approximately 15% since the halving. The absence of market volatility led to a wave of options selling.
Additionally, the mood among investors towards Bitcoin has been dampened by recent outflows from Bitcoin ETFs. It seems unlikely that Bitcoin will reach its record highs again soon, given the potential obstacles it may encounter.
Arthur Hayes Predicts Crypto Market Recovery
Expert: Arthur Hayes, co-founder of BitMEX, has identified a significant bullish indicator for both the cryptocurrency and stock markets. The recent pessimism in the crypto market was mainly driven by macroeconomic factors. However, Hayes disclosed that US tax revenues amounting to $200 billion have been deposited into the U.S. Treasury General Account (TGA). Further developments could potentially lead to a market rebound.
In the previous 24 hours, Bitcoin’s price experienced a rise of 1%, now standing at $64,302. The lowest and highest prices during this period were recorded as $62,783 and $65,275 respectively. Notably, there has been a slight uptick in the trading volume over the last day.
As an analyst, I’m closely monitoring today’s release of the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) index. Based on current expectations, the annual PCE rate is projected to rise for the second consecutive month, reaching 2.6% from the previous rate of 2.5%. On the other hand, the annual core PCE inflation, which excludes food and energy prices, is anticipated to decrease to 2.6%, marking a three-year low from the prior rate of 2.8%. These figures could provide valuable insights into the direction of prices over the coming weeks.
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2024-04-26 12:44