Today options on bitcoin worth a total of $1.5 billion expired.
This Friday 8 AM UTC, 38.6k $BTC are set to expire on Deribit with a notional value of $1.44 billion.
Max pain price $35,000, Put/Call ratio: 0.86 pic.twitter.com/QBwxExZ8w2
— unfolded. (@cryptounfolded) July 27, 2021
It’s not a record, but the figure is still significant.
In fact, there were options expiring on Deribit at 8 AM UTC (10 CET) for about 38,600 BTC, equivalent to about $1.44 billion, with max pain of $35,000 and a put/call ratio of 0.86.
Just shortly after 10 AM CET, there was a surge of selling pressure on the crypto markets which caused prices to fall.
For example, the price of bitcoin dropped from $39,750 at 10:22 AM CET to $38,350 at 11:29 AM CET when news broke that Binance had decided to close derivatives trading in three European countries.
As a result, at the time the options expired, the price did not react significantly, but about 20 minutes later it fell sharply by 3.5%.
It is quite possible that these movements are due to the European markets, which are usually not very strong due to much lower volumes of cryptocurrency trading than in the US or Asia, and that their impact has already been exhausted.
However, the current price of bitcoin is well above the approximately $35,000 price of a month ago, so many traders who bought options while the price was lower than it is today may have made a profit by selling today.
The put/call ratio of 0.86 was also moderately bearish, so now that the options have expired there is a chance that prices will rise instead.
For example, Arcane Research analyst Vetle Lunde said that the price of bitcoin has often risen strongly in 2021 after monthly option expirations, so this could now happen again.
In light of this, it is possible that another brief cycle could begin today, which could be characterized by a price increase. However, these remain only hypotheses due mainly to the comparison with past experiences, which may not be repeated.
However, the fact that the whales continued to accumulate until the price was significantly below $40,000 would seem to support this hypothesis.