On Friday, July 26, a significant number of Bitcoin and Ethereum options contracts are set to expire, with a total notional value of approximately $6 billion. This expiry event is particularly noteworthy due to its size and the timing at the end of the month. The Bitcoin options contracts have a put/call ratio of 0.61, indicating that there are almost twice as many long contracts expiring as shorts. In contrast, the Ethereum options contracts have a put/call ratio of 0.46, signifying more than twice as many long contracts expiring than shorts.
Open interest for Bitcoin options contracts at higher strike prices suggests bullish sentiment, with $942 million at a $70,000 strike price and a massive $1.3 billion at a $100,000 strike price. However, there is also significant open interest on the put side, with around $500 million at the $60,000 strike price. Despite the launch of spot Ethereum ETFs in the United States, spot markets for Bitcoin have lost momentum this week.
For Ethereum options contracts, the largest amount of open interest is at the $4,000 strike price, totaling over $520 million. Despite the launch of spot ETFs for Ethereum, the cryptocurrency has experienced a drop in price, falling 11% since the launch day to $3,100 on July 25. However, it managed to recover to $3,250 during Asian trading on Friday.
Spot markets have shown mixed performance, with Bitcoin briefly retracing to $64,000 on July 25 after failing to break through resistance at $68,000 earlier in the week. Ethereum, on the other hand, has faced more significant losses despite the ETF launch, indicating market uncertainty and volatility.
In addition to the options expiry event, Ethereum ETFs saw outflows on July 25 due to a significant Grayscale exodus of $346 million. Despite some positive inflows from BlackRock and Fidelity, the overall outflows amount to $152 million. This further highlights the uncertainty and bearish sentiment in the market.
Overall, the upcoming options expiry event for Bitcoin and Ethereum, combined with market trends and performance, will likely result in increased volatility and potential price fluctuations in the cryptocurrency market. Traders and investors should closely monitor these developments to make informed decisions about their positions and strategies.
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