Highlights
Once again, the Bitcoin (BTC) price has surged by 4% in the past 24 hours, edging closer to the $60,000 mark, coinciding with the upcoming weekly Bitcoin options expiry. Nevertheless, market indicators suggest that the derivatives market might experience a subdued summer period.
Greeks.Live reports that 23,000 BTC options are on the verge of expiry, accompanied by a Put Call Ratio of 0.49. These options represent a notional value of $1.4 billion, with a Maxpain point positioned at $61,000.
Despite the recent listing of Bitcoin ETFs in Hong Kong failing to stimulate significant volume, outflows persist from US BTC ETFs. This market weakness has contributed to a decline in overall market confidence. Additionally, the Implied Volatility (IV) across major terms is on a downward trend, currently sitting at the average level observed during the winter bull market.
Despite these challenges, there are indications of support, making the current buying sentiment a prudent choice. However, the prolonged period of sideways trading is unlikely to persist, with a potential absence of a rebound leading to downward pressure.
Bitcoin implied volatility has experienced a notable decrease since mid-April. Data from The Block’s Data Dashboard illustrates this trend, with the implied volatility of bitcoin at-the-money options declining from over 77% to under 60% across various expiration periods, including one-week, one-month, and multi-month expiries.
On the other hand, top lawmakers have recently joined the bandwagon urging the U.S. Securities and Exchange Commission to approve options for Bitcoin ETFs. In a communication addressed to SEC Chair Gary Gensler on Wednesday, Representatives Wiley Nickel (D-N.C.) and Mike Flood (R-Neb) highlighted the SEC’s approval of spot Bitcoin ETFs in January, which has since attracted billions of dollars in investments.
Similar to Bitcoin, 330,000 ETH options are set to expire, featuring a Put Call Ratio of 0.36, a Maxpain point at $3,000, and a notional value totaling $1 billion. Similar to Bitcoin’s IV, the implied volatility of Ethereum ATM options has notably decreased since mid-April.
This decline in Ethereum IV suggests that traders anticipate a reduction in price volatility as they await regulatory clarity on Ethereum’s status in the U.S.
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