Bitcoin (BTC) Surges Amid Geopolitical Developments

Leading cryptocurrency Bitcoin (BTC) rose from $100,000 at the beginning of the week to over $108,000 following news of a ceasefire between Israel and Iran.

Unable to sustain this momentum, BTC has been trading sideways at the $107,000 level. Today marks the option contracts expiration in the crypto market, a regular occurrence every Friday.

These options are pivotal as they coincide with the last Friday of both the week and the month. According to recent 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.

• Bitcoin Options Data:

  • Put/Call Ratio: 0.75
  • Maximum Loss Point: $102,000
  • Notional Value: $15 billion

• Ethereum Options Data:

  • Put/Call Ratio: 0.52
  • Maximum Loss Point: $2,200
  • Notional Value: $2.29 billion

The maximum pain point is crucial, representing the price level at which the largest quantity of options traders will incur significant losses as options near expiration. Considering the looming expiration of $15 billion in Bitcoin options on June 27, volatility in BTC prices is anticipated. The maximum pain point is positioned at $102,000 for BTC and $2,200 for Ethereum, suggesting that market manipulation could occur to push prices toward these levels, as many investors are currently in profit. This could prompt some to realize their gains, increasing overall price volatility.

Examining Bitcoin’s options data, Lin Chen, Deribit Asia Business Development Head, noted that the ratio of put to call options has risen to 0.75. Although call options remain more prevalent, an increasing number of put options have emerged in recent days. Chen emphasized that this trend is not exclusively predictive of a market decline but may also indicate investors seeking opportunities to buy Bitcoin at lower prices in anticipation of a potential decline:

> “The increase in put options does not mean that investors anticipate 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.