$13B Bitcoin options expiry looms: Will bulls endure more pain in June?

Key takeaways:

• Puts (sell) options predominate the June 26 expiry with nett advantages of $1B to $3.4B, leaving bulls exposed.
• Despite Strategy buying BTC again, dense telephone (buy) positioning supra $72,000 volition apt reenforce bearish momentum.

$13 cardinal successful Bitcoin (BTC) options unfastened involvement is acceptable to expire connected June 26, perchance giving bears caller ammunition for much downside unit connected BTC price. Bitcoin’s 14% terms driblet successful June truthful acold has caught bulls flat-footed, since astir telephone (buy) options were stacked astatine $68,000 oregon higher. Will this monthly expiry unfastened the doorway for a July recovery?

Deribit options predominate the country with $10.4 cardinal successful unfastened interest, representing a 79% marketplace share. OKX sits successful 2nd astatine 6%, followed by Binance and CME astatine 5% each, and Bybit with 4%. It’s worthy digging into however Deribit traders are positioned up of the monthly expiry.

Bitcoin June 26 options unfastened involvement astatine Deribit, BTC. Source: Deribit

Total telephone options unfastened involvement astatine Deribit deed $6 billion, but 78% of that sits astatine $72,000 oregon higher. With little than a week to go, the effectual unfastened involvement volition apt shrink fast. In contrast, retired of the $4.5 cardinal successful enactment (sell) options unfastened interest, lone 28% hinge connected Bitcoin falling to $57,000 oregon below. This setup makes matters importantly worse for bulls overall.

Bitcoin bulls made the incorrect telephone connected Strategy and US regulation

Some of the bulls’ over-the-top optimism traces backmost to Strategy’s (MSTR US) assertive BTC buying spree successful April and May. The steadfast added 62,841 BTC successful conscionable 4 weeks, helping propulsion prices supra $73,000 successful May. But sentiment soured arsenic US-listed spot Bitcoin ETFs saw outflows footwear disconnected successful mid-May.

US-listed spot Bitcoin ETFs play nett flows, USD. Source: SoSoValue

Hopes for speedy transition of the Digital Asset PARITY Act successful the United States besides faded. The measure would person spared mining and staking rewards from taxes until sold. The marketplace took different deed from Strategy’s merchantability of 32 BTC and the resulting ETF outflows, adjacent arsenic excitement astir tech stocks grew aft Google (GOOG US) and Nvidia’s (NVDA US) currency raises.

Related: Bitcoin decouples from tech stocks–Is $60K BTC’s adjacent stop?

Bulls inactive person clip to chopped losses, but puts intelligibly clasp the stronger manus close now. Here are 4 apt scenarios for Friday’s BTC options expiry astatine Deribit based connected existent terms trends:

• Between $57,000 and $61,000: The nett effect favors the enactment (sell) instruments by $3.4 billion.
• Between $61,001 and $65,000: The nett effect favors the enactment (sell) instruments by $2.7 billion.
• Between $65,001 and $69,000: The nett effect favors the enactment (sell) instruments by $1.7 billion.
• Between $69,001 and $71,000: The nett effect favors the enactment (sell) instruments by $1 billion.

Even a 12% rally from the existent $63,000 level won’t flip the June expiry successful favour of calls. While this doesn’t fastener successful carnivore power for July, the expiry result volition astir apt measurement connected bullish sentiment heading into the caller month.