On April 20, the cryptocurrency market marked the fourth Bitcoin halving event. However, contrary to some expectations, Bitcoin and other crypto prices didn’t experience a substantial rally or noticeable increase following the event. Instead, traders are keeping a close eye on the first options expiry in the crypto market after the halving. This particular expiry also coincides with the monthly expiry, which could lead to heightened volatility. Deribit reported that approximately $9.4 billion worth of crypto options will expire this coming Friday.
$9.4 Billion in Crypto Options Expiry
After the Bitcoin halving, there’s been a generally positive outlook among investors, keeping the price above $66,000. The Fear & Greed Index, a measure of crypto market sentiment, shows an improvement in mood, rising from 57 (neutral) to 72 (greed). Market players are currently biding their time, hoping for any major challenges to subside before making fresh investments.
Approximately 94,000 Bitcoin options with a total notional value of around $6.3 billion are due to expire this coming Friday. The put-call ratio stands at 0.68, suggesting an increase in demand for put options as the monthly expiration draws near. The price level that could cause the most significant market reaction is currently set at $61,000, which is under the current Bitcoin price. As a result, investors should brace themselves for substantial volatility and potential price decreases on the day of expiry.
Additionally, approximately 941,000 Ethereum options with a total value of around $3.1 billion are approaching their expiration dates. The put-call ratio stands at 0.49. The maximum potential loss for these options is currently at $3,100, but the Ethereum price is now trading above this level and higher than the current price of $3,252.
In the past day, there’s been a rise in the number of put contracts being opened compared to call contracts, with a put-to-call ratio of 0.84. This suggests that traders are preparing for potential price drops, which could lead to the asset reaching its lowest point (max pain point).
Significantly, Deribit announced in a recent update on X that the actual volatility of Bitcoin (BTC) has spiked due to a significant rise in the BTC Volatility Index (DVOL), which is closely linked to the approaching crypto options expiration dates.
Additionally, IT Tech expert in on-chain analysis has issued a cautionary note about imminent liquidation as a result of excessive leverage. He pointed out that a greater number of sell orders have been executed on the perpetual contract (CVD Perp), whereas the spot contract (CVD Spot) is starting to exhibit indications of buying interest. This could pave the way for an impressive Bitcoin price surge.
Bitcoin Price Performance
The price of Bitcoin has seen significant fluctuations in the last 24 hours, currently hovering around $66,500. The lowest and highest points of this volatility were $65,864 and $67,148 respectively. Additionally, there’s been a slight dip in trading volume over the same period.
In the last day, Bitcoin futures open interest on cryptocurrency exchanges has grown by more than 1%, with a significant portion of this buying occurring in the final hours. The current Bitcoin futures open interest amounts to 480,070 contracts, equivalent to a value of around $31.96 billion.
A new investor amassed approximately 500 Bitcoins, equating to around $33 million, during Bitcoin’s consolidation period, in anticipation of driving up its price towards $70,000. However, it is important to note that the release of the U.S. Personal Consumption Expenditures (PCE) inflation data on Friday could dampen trading activity.
The US dollar index (DXY) experienced a slight decrease, landing below the 106 mark. However, its current level is notably higher than in previous weeks. Additionally, the US 10-year Treasury yield (US10Y) has surged to reach a 6-month peak of 4.636%. This upward trend in yields is exerting considerable influence on Bitcoin’s price.
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2024-04-24 12:40