Why Tomorrow’s $1B Bitcoin Options Expiry May Not Trigger Any Volatility

bitcoinist.net

  • Tomorrow, $1 billion worth of monthly and quarterly Bitcoin options will be expiring
  • This will be the largest options expiry that BTC has ever seen
  • Some analysts believe that the event will spark some massive volatility
  • That being said, the sharp downwards movement seen yesterday evening may have actually been the movement that was widely expected by traders
  • One analyst believes that this signals that the benchmark cryptocurrency is poised to see even further sideways trading, with tomorrow’s expiry being a non-event now

Bitcoin is just one day away from seeing its largest options expiry ever. This notable event comes as the cryptocurrency continues trading within a range that has been formed and respected over a multi-month period.

Some analysts do believe that the imminent $1 billion options expiry will help put an end to this trading range and provide the cryptocurrency with some much-needed momentum.

In spite of this reasonable assumption, one trader recently explained that he believes the decline seen yesterday evening was the options-induced movement everyone was anticipating.

As such, BTC may continue to extend its tedious bout of consolidation in the days and weeks ahead.

Bitcoin to See Largest Options Expiry Ever Tomorrow 

Tomorrow is a big day for Bitcoin, as analysts will finally get to see whether or not the option market’s growing size will be enough to have any serious influence over BTC’s market dynamic.

Until recently, options only accounted for an incredibly small portion of the benchmark cryptocurrency’s open interest.

This has changed significantly in recent times, however, and the $1 billion contract expiry taking place on June 26th will be the largest ever seen.

Currently, two entities account for all of the options trading volume: Deribit and the CME. Deribit currently wields significantly higher trading volume than the CME, although it has been losing some of its market dominance in recent times.

According to a recent post from the options trading platform, their total options open interest currently sits at $1.4 billion.

“Only 24 hours until the Q2 expiry! Are you ready? Our option stats: Crypto market total OI: $1.96 billion. Deribit Option market total OI: $1.4 Billion. BTC June 26th OI: 73,634 contracts worth $675.3 million. ETH June 26th OI: 308,635 contract worth $71.4 million,” they explained.

Bitcoin

Image Courtesy of Skew

Here’s Why This May Not Result in Any Volatility 

One trader explained that he does not believe tomorrow’s expiry will result in any notable volatility as many contend.

He thinks that this volatility was actually seen yesterday evening, when the cryptocurrency reeled down to lows within the sub-$9,000 region before posting a slight rebound.

“It seems to me the volatility everyone expects for the June 26 options expiry already happened, so with that premise I think the highest we could go is ~9480 around the squiggle, where the VAL of previous range + POC + VAH of this range are resting. TLDR: More ranging,” he noted.

Image Courtesy of Red. Chart via TradingView
Featured image from Shutterstock. Charts from TradingView.

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