How Bitcoin options expiry affects the price tomorrow?
Tomorrow, Bitcoin’s options market is on its way to a record $1 billion monthly expiry! there are 114,700 option contracts (notional value of over $1 billion) set to expire on June 26 across major exchanges. and if you think this means nothing in the $118B BTC's market cap, I may prove you wrong very soon!
let's explain options to see the difference with futures contact:
Buying a bitcoin put option gives the trader the right (without obligation), to short a specific amount of BTC at a limit price, at or before the expiration date. Obviously if the price drops and the buyer executed the put option, (s)he has to buy bitcoin at a probably higher cost.
Futures are very similar to options but options don't move as quickly as futures contracts.
the impact on price of Bitcoin?
Bitcoin may fluctuate per price moves over the coming months if traders rollover short positions in June contracts to July and September expiry.
This can be in both sides, getting it out of the $9k - $10k channel which it has been hovering in the past weeks.
the target for below $9K is daily EMA200 which is around $8200 at the moment and on the upper side we have resistance levels on previous highs and $11k channel.
trading at this time, can be like a shot in the dark! if you wish to step in (instead of staying aside) I suggest you to consider double measures on your money management rules at least.
I may post this on my other social media accounts, where you will find me with same username: @honarparvar