$5.7 billion BTC and ETH Options expire today! Under the pressure of pain points, the crypto market may face a critical fluctuation test.

As the cryptocurrency market revels, traders need to be wary of the short-term fluctuations triggered by the Bitcoin BTC and Ethereum ETH options contracts expiring today. Data shows that derivatives contracts with a notional value exceeding $5 billion will expire on July 18, with BTC contracts accounting for $4.91 billion (pain point at $114,000) and ETH contracts accounting for $851 million (pain point at $2,950). Analysts point out that current BTC bullish sentiment is evident (Long-Short Ratio 0.78), while ETH's bullish and bearish forces are balanced (Long-Short Ratio 1.01). Although the market generally expects the bull run to continue, the significant deviation between the pain points and current prices (BTC current price $120,259 / ETH current price $3,426) may trigger a price pullback, and the market is expected to return to stability after the options expiration.

$5.76 billion options pressure: BTC pain point deviates 5% from the current price, ETH pain point differs by 14% In the frenzied atmosphere of a full-blown bull run in the crypto market, traders need to prepare for the upcoming fluctuations. The notional value of Bitcoin BTC and Ethereum ETH options contracts expiring today (July 18) reaches as high as 5.76 billion USD. According to data from the derivatives exchange Deribit:

  • BTC Options: Open interest of 40,945 contracts, notional value of $4.91 billion. Pain point (maximum loss price) is $114,000, which is 5.2% lower than the current spot price of $120,259.

  • ETH Options: Open interest of 237,466 contracts, notional value of $851 million. Pain point at $2,950, which is 13.9% lower than the current price of $3,426. The Long-Short Ratio indicates a divergence in market sentiment: BTC is bullish dominant (Long-Short Ratio 0.78), while ETH has balanced long and short forces (Long-Short Ratio 1.01).

Expiration scale hits a new high: increased by 13% compared to last week, institutions deploy risk hedging strategies The scale of contracts expiring this week has significantly expanded compared to the previous period. The total scale has increased by 13% compared to the $4.31 billion BTC contracts expiring on July 11 and the $712 million ETH contracts. In the face of potential fluctuations, professional trading institutions are taking defensive measures:

  • Use Risk Reversal Strategy: Sell 30-day options put contracts while buying call contracts, increasing tail risk protection while maintaining a bullish stance.
  • Layout Volatility Arbitrage: The implied volatility of ETH remains at a high level of 70%, creating opportunities for basis trading and volatility squeeze strategies. Analysis agency Greeks.live pointed out: "Traders generally expect BTC to break through $150,000 by the end of the year, but anticipate a deep pullback in the third quarter, and are currently actively adjusting positions to cope with today's fluctuation."

Market Impact: Pain point suppression or triggering a pullback, long-term bullish logic remains unchanged Historical data shows that when the underlying price is significantly above the pain point, it often triggers a short-term price pullback around the expiration of the options contract. Currently, the spot prices of BTC and ETH are 5.2% and 13.9% above their respective pain points, with significant technical pressure. However, this fluctuation is usually brief:

  1. Short-term pressure: Market makers will reduce their spot holdings to hedge against Gamma risk, increasing selling pressure.
  2. Subsequent Stabilization: Unsettled contracts are cleared after expiration, market liquidity improves, and price volatility decreases.
  3. Trend unchanged: The options market continues to maintain a bullish structure, with BTC bullish contract open interest far exceeding bearish.

Conclusion: The "fluctuation storm" triggered by the $5.76 billion options expiration will serve as a touchstone for the bull run's quality. Although the pressure at pain points may trigger a short-term pullback for BTC/ETH, institutions are conveying a "cautiously optimistic" signal through risk reversal strategies—while guarding against black swan risks, they are firmly betting on a breakthrough of previous highs in the second half of the year. Investors should pay attention to market fluctuations around 4 PM Beijing time today (the Deribit settlement point); a decline in volatility may signal the start of a new trend.

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