Today is undoubtedly characterized by the expiring of the monthly options on Bitcoin offered by the CME.
This translates into 145,000 options that are expiring this morning, at 8:00 UTC (10:00 CEST), for a value of $1.06 billion.
This expiration has attracted attention several times, leading to very curious interpretations. The bitcoin options contract cannot be equated to commodity options on the CME which is settled in cash, US dollars, a physical asset.
This expiration will most likely continue to attract attention in the coming weeks if trading volumes stay at the levels of May and June or increase.
Since January of this year, when options on the CME were launched, this has been the period with the highest trading volumes.
Yesterday, on all platforms including the OTC and the main Derebit, which traded over 1.2 billion yesterday, the aggregate trading volume on options for the first time was an all-time record of 1.8 billion.
The options tool is increasingly used by professional traders and miners who, after the May 11th halving, hedge against risk and collect the reward by selling options. It is no coincidence that the trading volumes exploded between May and June, after the introduction of the lower block reward. Basically, some miners cover the management risk through options.
Volatility remains at the lowest levels of the last three months, which are the levels of the first quarter of 2020 and equivalent to the volatility between the end of 2019 and the beginning of 2020.
As for daily fluctuations on a monthly and quarterly basis, it remains at 3%, the lowest levels since mid-March.
The expiring of Bitcoin options could generate an increase in volatility.
In particular, it will be interesting to follow what will be the relocation of monthly hedges that this month focused not so much on support levels between $7,000 and $8,000 but on a projection for a possible price increase above $9,900.
But better still, high coverage contracts were positioned between $11,000 and $13,500. These were the coverage levels of a possible price movement by Bitcoin.
In any case, it will be interesting to follow the deadlines in the next few hours. The CME today holds 24% of total options trading. Derebit remains the leader in derivatives with 69% of the entire market share.
Today starts with a substantial balance of negative and positive signs in the crypto market.
Looking at the list of the most capitalized coins, there are movements around parity.
In order to find the first positive sign, rising above 2% daily, it is necessary to go down to the 13th position occupied by Chainlink (LINK), which today rises by 2%. Among the top 20, it is one of the best rises together with Leo Token (LEO) that rises again and reaches above $1.2.
After failing to exceed the absolute all-time high on Wednesday, Chainlink is back up again today, returning to $4.73.
On the other side, Tezos (XTZ), just above Chainlink in 12th position, drops back 2.5%.
Among the top 50, the best rise of the day is for Ontology (ONT) and Basic Attention Token (BAT) both up 7%.
Compound (COMP) continues to be characterized by the high volatility that today goes up by 4%, with prices that after having pushed under 200 dollars in the last 48 hours, now try to recover by returning above 250 dollars, where they have been oscillating in these hours.
The weekly balance sees a prevalence of negative signs. The worst among the top 30 is XRP that from last Friday’s levels loses about 4%. Tezos is even worse, losing 4.5%.
The best increase on a weekly basis belongs to Chainlink with 15%. Compound, in 24th position, rises about 50%. Among the top 10, the best is Ethereum who gains just over 1.5%.
The market cap remains above 260 billion dollars with Bitcoin dominance at 64.5%. Ethereum remains just under 10%. XRP is also stable at 3.07% although during the course of this week Ripple has pushed even below 3%, the lowest level in the last three years.
Bitcoin fluctuates today just below the $9,250 threshold, one step away from the lows of June 15th that marked the starting point of the current monthly sub-cycle. A sub-cycle that is not showing strength and has moved into the final part, usually characterized by weakness.
If this were to push prices below the June 15th lows of $8,900, there would be room to test the previous lows of late May at $8,600-8,800. These are the levels to monitor over the weekend.
An important signal will come up with a recovery of $9,600.
A weekly close below $9,300 on Sunday would mark the third consecutive week downwards for Bitcoin, an event that hasn’t happened since early March, although with a bearish formation, that of March, decidedly different from the current one.
From February to mid-March highs Bitcoin lost more than 60%, while the current movement from early June highs sees a loss of just over 10%.
The prices of Ethereum are reported in contact with the $230, the lower neckline of the bullish channel that has been accompanying the prices of Ethereum since mid-March.
For ETH, it is necessary to maintain the threshold of 215 dollars in order not to go to undermine the bullish trend which has been present for three months.
Upwards, the highs recorded on Wednesday at $250 remain important. A rise above this level accompanied by volumes, a condition that was not present on Wednesday, would push ETH prices to go to test the highs in the 280-290 dollar area recorded last February.