Bitcoin, not upset by expiration of quarterly options | CoinDesk JAPAN | Coin Desk Japan

Bitcoin (BTC) and Ethereum (ETH) traded within their recent price ranges without the expiry of quarterly options and a rise in the dollar index spooking investors.

Approximately 150,000 BTC option contracts worth approximately $4.5 billion (approximately ¥651 billion) and $2.3 billion (approximately 332.7 billion 1.2 million ETC option contracts equivalent to JPY) have expired on Deribit, the world’s leading crypto asset options exchange. Deribit manages over 85% of the world’s crypto options trading.

This expiry was crucial given that BTC options market makers were “long gamma” and could influence spot price movements through hedging activity. BTC, the largest cryptocurrency by market capitalization, traded between $30,000 and $31,000 in the days leading up to settlement, then remained in a tight range, according to CoinDesk data, and reached 10:40 ( UTC), it rose just 1% to $30,700.

Bitcoin price chart. (CoinDesk/Highcharts.com)

The so-called maximum pain point for bitcoin options in June was $26,500. This is the level at which option buyers lose the most at expiration.

The general theory is that option sellers (usually large traders) act like a magnet towards expiration as they try to push the price to that level in order to inflict maximum losses on the buyer. It is said. During the bull market in late 2020 and early 2021, Bitcoin consistently gravitated to the maximum pain point before expiration and resumed its rally after settlement.

The expiration date is over and the magnet is gone. As such, barring other factors, the cryptocurrency could resume its rally.

“BTC’s significantly reduced maximum pain point of $26,500 could ease the general downward pressure on post-expiration prices,” said Luke Stry, chief commercial officer at Deribit. Luuk Strijers said.

The maximum pain point for Ethereum options expiring in June was $1,700. ETH is trading at around $1,900 at the time of writing, rising 2% today, its biggest gain in over a week.

Focus on economic indicators

The Dollar Index (DXY), which tracks the value of the US dollar against major currencies including the euro, hit a two-week high of 103.50 at the time of writing. Notably, the weekly unemployment claims, released on June 29, showed the lowest number of Americans who filed for new unemployment benefits last week in 20 months.

At 12:30 UTC on June 30, the US Department of Commerce’s Bureau of Economic Analysis (BEA) released the Federal Reserve’s preferred inflation rate indicator, Core. The Personal Consumption Expenditure (PCE) Price Index has been released.

Depending on its outcome, the data will likely show that the core element of inflation remains robust, strengthening the case for higher US long-term interest rates and fueling a stronger dollar.

The index was expected to rise 0.4% month-on-month in May, following a 0.38% gain in April, according to economist forecasts surveyed by FactSet and published by Barron’s. The result was an increase of 0.3%. Also, compared to the same month of the previous year, it was expected to increase by 4.7%, which was unchanged from the previous month, but the result was a 4.6% increase, which was almost as expected.

Rising DXY usually leads to global monetary tightening and market de-risking. However, the recent spot Bitcoin ETF filings by BlackRock, Invesco and Fidelity have turned crypto market sentiment around, so even if there is a bitcoin drop. It may remain modest or be short-lived.

Traders may also take cues from US consumer spending and income statistics, which are highlighted along with core PCE values.

｜Translation: CoinDesk JAPANN
｜Editing: Toshihiko Inoue
｜Image: CoinDesk/Highcharts.com
｜Original: Bitcoin Steady Near $31K After Options Expiry; Dollar Index Rises Before Key US Inflation Data