Impact of This Week’s $9.25B Bitcoin Options Expiry on Bulls and Bears

The hype surrounding Bitcoin's halving has faded, and now the focus shifts to the implications of June's massive $9.25 billion Bitcoin options expiry, set for the morning of June 28. 

Source: watcher.guru

This event is crucial as it coincides with the end of the first half of 2024 and historically represents one of the largest expiries across financial markets, including traditional finance. Investor concerns have heightened following NVidia, a $3 trillion tech giant, experiencing a 12% decline from its June 20th peak.

Recent Downward Pressure On Bitcoin Potentially Gave Bears A $430 Million Advantage

Two months post Bitcoin's halving, bullish sentiment remains evident with 57% of bets placed above $70,000. The 0.51 put-to-call ratio highlights a discrepancy between the $4.4 billion in call open interest and the $2.25 billion in put options. However, recent market weakness has rendered many call options worthless if Bitcoin stays near $61,500 by 8:00 am UTC on June 28. Options to buy at $62,000 and $64,000, as well as put options at $58,000 and $60,000, would be rendered null..

Bullish investors cite weak macroeconomic data favoring aggressive rate cuts and U.S. monetary stimulus. Concerns mount with U.S. single family home sales dropping 11.3% year over year in May, while inventory clearance time rose to 9.3 months. If Bitcoin remains below $65,000 by June 28, only $440 million in call options will expire, reflecting the impact of excessively bullish sentiment.

Bitcoin Bulls Must Reach $64,000 To Prevent Losses

Based on current price trends, there are four likely scenarios regarding options contracts for calls and puts on June 28, varying with the settlement price. Between $57,000 and $60,000, there are 660 calls versus 14,850 puts, favoring put (sell) options by $820 million. Between $60,000 and $62,000, there are 3,910 calls versus 11,140 puts, with puts favored by $430 million. Between $62,000 and $64,000, there are 5,220 calls versus 8,690 puts, favoring puts by $215 million. Between $64,000 and $66,000, there are 6,880 calls versus 6,940 puts, resulting in a balanced outcome. This rough calculation assumes call options are used mainly for bullish bets and put options for neutral-to-bearish positions, without considering more complex strategies. In short, Bitcoin bulls need to maintain the $60,000 support ahead of the June 28 expiry to avoid a potential $820 million scenario favoring put options.

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