Bitcoin options: How will tomorrow’s $4.7B expiry impact BTC price?

The expiry of Bitcoin’s (BTC) $4.7 billion monthly options on June 30 could be a determining factor in whether the $30,000 price level can be maintained as a long-term support, potentially allowing for further bullish momentum.

Why is Bitcoin breaking yearly highs?

Analysts deem Bitcoin’s surge above $27,000 as a result of the multiple pending applications for Bitcoin exchange-traded fund (ETF)s, including those of BlackRock and ARK Invest.

Expectations were further raised that Grayscale may be able to transform its Grayscale Bitcoin Trust (GBTC) into a Bitcoin Exchange-Traded Fund (ETF).

 $31,000 caps Bitcoin price gains for now

Conversely, Bitcoin bears will seek to capitalize on macroeconomic and regulatory obstacles, such as exchanges requiring mandatory Know Your Customer (KYC) protocols.

On June 28, KuCoin declared the forthcoming upgrade of their KYC system as a measure to enhance adherence to international Anti-Money Laundering laws.

As the network hashrate hit 400 exahashes per second, there is growing worry about the effect of miners’ sell pressure. The Glassnode analytics company observed that miners sent a record amount of BTC income to exchanges over the last week, totaling $128 million. Interestingly, the activity parallels peaks observed during the 2021 bull market when miners cashed out their gains.

At the European Central Bank forum in Portugal, Federal Reserve (Fed) Chair Jerome Powell cautioned that most policymakers anticipate two additional rate hikes this year. The CME FedWatch Tool indicates that investors are pricing in a 82% probability of a 25 basis point interest rate rise on July 26.

The price of Bitcoin last flirted with the $31,000 mark on June 27, yet the resistance was more powerful than expected. The subsequent drop to $30,000 bolsters the idea of sideways trading in the near future as investors contemplate the effects of further interest rate hikes by the Federal Reserve.

The potential for a restrictive global economy could be why some Bitcoin traders chose to cash out their profits, thereby limiting the potential for the price to increase.

$4.7 billion out of reach as bulls were too optimistic

The open interest for the June 30 options expiry is estimated at $4.7 billion, but this figure is likely to be lower as traders had anticipated a price of $32,000 or more. This optimism was spurred by Bitcoin’s 25.5% surge between June 15 and June 23, which pushed the price to the $31,000 resistance level.

The ratio of puts to calls reflects the disparity between the $3.1 million in call (buy) options open interest and the $1.7 million in put (sell) options.

If the price of Bitcoin stays close to $30,500 at 8:00 am UTC on June 30, only $630 million of these call (buy) options will be available. This difference occurs because the option to purchase Bitcoin at $31,000 or $32,000 is ineffective if BTC is trading below those levels on the expiration date.

Bitcoin bears aim for sub-$30,000 to balance the scales

Below are the four most probable scenarios based on the current cost movement. The amount of options contracts available on June 30 for call (bull) and put (bear) instruments fluctuates depending on the expiration price. The disproportion favoring either side constitutes the potential gain.

This rough calculation takes into account the call options used for bullish investments and the put options only for neutral to bearish trades. However, this simplification overlooks more intricate investment approaches.

For example, a trader could have bought a put option, thus gaining a beneficial outlook on Bitcoin above a certain cost. Sadly, there is no simple method to calculate this effect.

Will $30K be a new launching pad for Bitcoin bulls?

Therefore, it will depend on whether BTC price bears are willing to take a chance while the SEC is examining the possibility of a spot Bitcoin ETF approval.

Although it is not possible to predict the amount or timing of the inflow, the possibility of a $440 million profit exists should Bitcoin’s price remain above $30,000 in the near future.

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