Bitcoin options implied volatility has surged by 5% over the last week with traders on Binance opening short positions for bitcoin in anticipation of another drop in BTC.
After hitting the weekly high of $65,500, Bitcoin price is facing partial retracement dropping 1% in the last 24 hours and trading around $64,000. Traders are closely watching the developments with the weekly Bitcoin options expiry today.
As per the data from Greeks.Live, a total of 21,000 Bitcoin Options are set to expire today with a put/call ratio of 1.2, a notional value of $1.2 billion, and the max pain point at $62,000. The crypto market has experienced a sharp rally this week, driven by multiple positive developments. All major term implied volatilities (IVs) have shown substantial increases, generally by 5% or more compared to the previous week.
July 19 Options Data
21,000 BTC options expired with a Put Call Ratio of 1.2, a Maxpain point of $62,000 and a notional value of $1.3 billion.
140,000 ETH options expired with Put Call Ratio of 0.39, Maxpain point of $3,150 and notional value of $480 million.
The crypto market… pic.twitter.com/XmOI0z1V4H— Greeks.live (@GreeksLive) July 19, 2024
A rising put-call ratio, particularly one greater than 0.7 or exceeding 1, indicates that equity traders are purchasing more puts than calls. This suggests that bearish sentiment is growing in the market, with investors either speculating on a market decline or hedging their portfolios against a potential sell-off.
The short-term prospect for Bitcoin doesn’t look very exciting with the chances for the BTC price to correct further up to $60,000 not ruled out.
Bitcoin Retail Investor Demand at 3-Year Low
In a post on X platform, Cryptoquant founder Ki Young Ju said that the Bitcoin retail demand has dropped to a 3-year low. He also noted that the average monthly change in the Bitcoin demand among retail investors has dropped under 15% in the last 30 days. “It’s measured by the 30-day change in total transfer volume for transactions under $10K,” Ju explained.
#Bitcoin retail investor demand is at a 3-year low.
It’s measured by the 30-day change in total transfer volume for transactions under $10K.
h/t @AxelAdlerJr pic.twitter.com/GnosvQUa7G
— Ki Young Ju (@ki_young_ju) July 18, 2024
While institutions usually handle large Bitcoin transactions, many market analysts believe that the significant Bitcoin price rally can only start with a surge in the retail investors’ interest. “The real bull run typically begins with massive buying volume driven by retail investors,” explained CryptoQuant contributor Minkyu Woo, suggesting that a surge in retail investor activity generally enhances market sentiment.
On-chain data provider Santiment reported that positive commentary toward Bitcoin has significantly declined despite the recent mid-sized crypto market bounce. Many traders, especially on Binance, are opening short positions, anticipating another drop in BTC. These factors combined increase the likelihood of a cryptocurrency rise.
