As the $4.7 billion Bitcoin monthly options expiry approaches on June 30, market participants eagerly await its outcome, which could have significant implications for Bitcoin’s long-term price outlook. Currently trading at $30,746, the expiry will determine if the $30,000 level solidifies as a key support level, potentially paving the way for further bullish momentum.
The recent surge in Bitcoin’s price above $27,000 is widely attributed to the anticipation surrounding several spot Bitcoin exchange-traded fund (ETF) applications. Market analysts believe that the applications submitted by industry giants such as BlackRock and ARK Invest played a role in driving the breakout. Furthermore, the news fueled expectations that Grayscale’s Bitcoin Trust could be converted into a Bitcoin ETF, adding to the positive sentiment.
On the other hand, Bitcoin bears are looking to exploit macroeconomic and regulatory headwinds. The implementation of mandatory Know Your Customer (KYC) procedures by exchanges has raised concerns. Just recently, KuCoin announced an upcoming KYC system upgrade to enhance compliance with global Anti-Money Laundering regulations. Additionally, miners’ sell pressure is causing apprehension, as they have been sending a significant percentage of their BTC revenue to exchanges. Analytics firm Glassnode reported that miners sent a record-high $128 million worth of BTC to exchanges in the past week, similar to the trend observed during the 2021 bull run.
Moreover, Federal Reserve Chair Jerome Powell’s remarks at the European Central Bank Forum on Central Banking highlighted the expectation of two more rate hikes this year. Investors are currently pricing in an 82% probability of a 25-basis-point interest rate increase on July 26, as indicated by the CME’s FedWatch Tool. These macroeconomic factors contribute to the cautious stance adopted by some Bitcoin traders, leading to profit-taking and limiting the price upside.
With a substantial open interest of $4.7 billion for the June 30 options expiry, the actual figure may be lower as bulls had anticipated price levels of $32,000 or higher. The put-to-call ratio of 0.56 reflects the imbalance between call (buy) and put (sell) options. However, if Bitcoin’s price remains close to $30,500 at the expiry time, only $630 million worth of call options will be available, rendering higher strike prices irrelevant if BTC trades below them.
Based on the current price action, four possible scenarios emerge for the expiry:
- Between $28,000 and $29,000: Bears in control, profiting $250 million.
- Between $29,000 and $30,000: Balanced between put and call options.
- Between $30,000 and $31,000: Net result favors call instruments by $440 million.
- Between $31,000 and $32,000: Net result favors call instruments by $670 million.
While these scenarios provide a crude estimate of the potential outcomes, they do not consider more complex investment strategies employed by traders.
The Bitcoin price trajectory following the options expiry will likely depend on whether bears are willing to maintain their exposure amidst the ongoing analysis of a potential spot Bitcoin ETF approval by the SEC. The outcome could pave the way for bulls to secure a $440 million profit by keeping the price above $30,000 in the short term.
Please note that cryptocurrency investments are subject to market risks, and this article does not constitute financial advice.