Bitcoin's 12% decline in June has left a significant portion of options contracts out of the money, with only 20% of the $8.6 billion open interest for June 26 currently profitable. This indicates widespread bearish sentiment and substantial losses for bullish options holders. The large volume of expiring out-of-the-money calls could reduce selling pressure from hedging activities, potentially setting a floor. Traders should monitor the impact on implied volatility and potential for a relief rally post-expiry as this deleveraging event concludes.
The substantial volume of out-of-the-money Bitcoin options signals a deleveraging event for bullish positions. This clearing of derivative overhang could reduce hedging-related selling, potentially stabilizing spot prices for BTC and ETH in the short term.
This options expiry highlights significant derivative market deleveraging following a price downturn. The clearing of these positions often precedes a period of reduced volatility, suggesting a potential for consolidation or a short-term relief bounce as hedging pressure subsides.
Only 20% of June 26 options open interest is currently in the money, while bitcoin's 12% monthly decline leaves most bullish positions underwater.