The end of the week is upon us again, and another batch of Bitcoin and Ethereum options are set to expire as spot markets remain rangebound.
Around 30,500 Bitcoin options contracts will expire on Friday, September 5, and they have a notional value of roughly $3.4 billion.
This expiry event is much smaller than last week’s end-of-month event, so there is unlikely to be any impact on spot markets, which are in the red again.
US jobs data has not been positive this week, and the country now has more unemployed people than job openings. “In two weeks, the Fed will cut rates and ‘blame’ a collapsing labor market; a lot is about to change,” commented the Kobeissi Letter.
This week’s batch of Bitcoin options contracts has a put/call ratio of 1.38, meaning that there are more short contracts expiring than longs, as bullish momentum wanes. There is a max pain point of $112,000, a little higher than spot prices, where most losses will be made on expiry.
Open interest (OI), or the value or number of BTC options contracts yet to expire, is highest at $140,000, which has reached $2.5 billion at this strike price on Deribit. There is also around $1.7 billion OI at $130,000, but $95,000 is a popular strike price for short sellers with $1.8 billion in OI.
Additionally, total Bitcoin futures OI currently stands at $79.5 billion, which has fallen from recent record highs, according to CoinGlass.
“The market is currently in a pronounced downtrend, with BTC’s short-term implied volatility (IV) surging to 40% and ETH’s short-term IV climbing to 70%,” reported crypto derivatives provider Greeks Live on Thursday.
“The decline in crypto-related stocks in the U.S. market, particularly the MicroStrategy series, triggered this downturn. Historically, September has been a month of relatively weak capital flows, with liquidity typically improving in the final quarter.”
In addition to today’s batch of Bitcoin options, there are around 300,000 Ethereum contracts that are also expiring, with a notional value of $1.3 billion, a max pain of $4,400, and a put/call ratio of 0.78. This brings Friday’s combined crypto options expiry notional value to around $4.7 billion.
Markets are in the red this Friday morning in Asia with a minor loss in total capitalization, which fell to $3.91 trillion.
Bitcoin saw heavy resistance at $112,000, tanked back to $109,500, then recovered to reach $111,300 on Friday morning. It has consolidated around these levels for almost two weeks.
Ether prices hit resistance above $4,400 and pulled back to $4,330 at the time of writing. ETH is also rangebound at current levels, though September threatens further losses.
The altcoins were predominantly in the red as another week comes to a close.
