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Leading cryptocurrency Bitcoin (BTC) rose from $100,000 at the beginning of the week to over $108,000 with news of a ceasefire between Israel and Iran.
Unable to hold on here, BTC continues to move sideways at the $107,000 level, while today, as every Friday, the expiration date for option contracts in the crypto market has come.
These options are even more important because they fall on the last Friday of both the week and the month.
According to the data, $15 billion worth of Bitcoin (BTC) and $2.29 billion worth of Ethereum (ETH) options will expire on June 27 on the Deribit derivatives exchange.
Accordingly, the Put/Call Ratio of BTC options is 0.75, the maximum loss point is $ 102,000 and the notional value is $ 15 billion.
When we look at Ethereum, ETH options have a Put/Call Ratio of 0.52, a maximum loss point of $2,200, and a notional value of $2.29 billion.
The maximum pain point is the level at which the price of a cryptocurrency settles at a certain value as an option approaches its expiration date, resulting in significant losses for the largest number of option traders.
At this point, significant volatility could be seen in Bitcoin prices as the $15 billion options expiration on June 27th. While the maximum pain point is at $102,000 for BTC and $2,200 for Ethereum, investors could push prices to this level through market manipulation, as market prices are above the maximum pain point.
This means that a large portion of investors are in profit. This may lead some investors to realize their profits and increase volatility in prices.
Evaluating the options data on Bitcoin, Deribit Asia Business Development Head Lin Chen stated that the ratio of put and call options started to increase and reached 0.75.
So, this means that while the number of call options is ultimately greater, the number of put options has also started to increase in recent days.
Lin Chen said that this situation is not only due to the expectation of a decline, but also because investors are looking for opportunities to buy at the bottom in case of a possible decline:
“The increase in put options does not mean that investors expect a decline in Bitcoin. Investors are acting strategically. Traders are taking positions either to sell put options and earn premium or to avoid being left out in the face of a possible decline and to buy BTC at the bottom.”
*This is not investment advice.