Today, Bitcoin‘s price dipped below $60,000 following news of alleged missile attacks from Israel against Iran, which turned out to be Iranian defense systems shooting down drones instead. Concurrently, both Bitcoin and Ethereum experienced a rebound due to short squeeze activities. However, traders remain cautious as the last crypto options expiry before the upcoming Bitcoin halving event approaches, with market volatility still prominent.
Bitcoin and Ethereum Options Worth $2.2 Billion Set To Expire
The cryptocurrency market is unpredictable right now, with Bitcoin’s upcoming halving and increasing conflicts between Israel and Iran causing fluctuations. Simultaneously, international stock markets experienced significant drops in share values due to rising oil prices from news of Middle Eastern turmoil.
Approximately 21,845 BTC options with a combined value of around $1.35 billion are upcoming for expiration. The put-call ratio stands at 0.63. According to Deribit’s data, the point that causes the maximum pain, or potential profit loss, is priced at $65,000. Many traders have opted for put options with a strike price set at $60,000, anticipating continued downward pressure on Bitcoin prices.
Over the past day, there have been more requests for BTC calls (16,450) compared to put requests (11,429) resulting in a put-call ratio of approximately 0.7 (or 69:100).
Simultaneously, approximately 297,818 Ethereum options with a total value of around $0.9 billion are due to expire. The put-call ratio stands at 0.42. The maximum price for these options is $3,125, which currently exceeds the Ethereum price of $3,045. This suggests that if Ethereum’s price does not recover above the maximum price point, there is a risk of liquidation for those who have purchased calls at this level.
Over the past day, there have been more requests to buy ETH (calls) than sell it (puts), with a total of 386,859 calls compared to only 109,907 puts. The put-call ratio is quite low at 0.28, indicating more bullish sentiment. However, traders are still uncertain about the possibility of further price decreases in ETH.
According to Greeks.live’s latest report, significant drops have been observed in major IVs (Implied Volatilities) for Bitcoin and Ethereum despite intense selling causing their prices to dip below $60,000 for Bitcoin and $3,000 for Ethereum. The price of call options has plunged sharply, resulting in a new low monthly skew during this ongoing bull market. As reported by Adam from Greeks.live, puts (options that give the right to sell an asset) are currently priced higher than calls (options that give the right to buy an asset).
Short Squeeze in Crypto Market Recovers Bitcoin Price
The price of Bitcoin typically bounces back before options expiry, and this time was no exception. Negative funding rates caused traders to buy Bitcoin, leading to a surge in its value. According to on-chain analyst IT Tech, there were several instances of “short squeezes” where Bitcoin’s price jumped by over 4% to reach $65,000.
According to well-known analyst Skew, there has been a surge in buying activity from long investors as short positions are being closed out. The market recovery, which has primarily been driven by increasing contracts and the spot price, also shows significant delta and volume in perpetual contracts due to the unwinding of previous short positions.
Instead of jumping into trades right away, traders might want to hold off until the US trading sessions begin for a clearer market direction. Keep an eye on potential support levels during this volatile period.
The US dollar index (DXY) decreased slightly to 106.11, yet remains elevated compared to previous weeks. Additionally, the US 10-year Treasury yield (US10Y) surged to a peak of 4.622% over the past six months, but later retreated to 4.606% due to erroneous reports about an attack. The inverse relationship between the DXY, Treasury yields, and Bitcoin price suggests that a rise in both the DXY and Treasury yields could potentially cause Bitcoin’s price to drop to around $60,000.
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2024-04-19 10:55