The recent crypto market rally has sparked much optimism amongst investors and enthusiasts alike. This surge came just around the time before the closing of a significant portion of Bitcoin and Ethereum options, suggesting a possible uptick in volatility. With around 40% of the average daily volume in the options market dominated by Bitcoin and Ethereum quarterly positions, the crypto market could potentially witness a significant increase in crypto asset prices.
This rally comes despite back-to-back lawsuits against major crypto exchanges Coinbase and Binance, which seem to have little to no effect on the price fluctuations in the crypto market. Market data indicates that a considerable share of BTC and ETH quarterly positions account for open interest by expiration. This implies that the market might experience substantial movement upon these positions expiring on June 30, 2023.
AmberData has provided statistics stating that 150,633 BTC options contracts worth $4.57 billion and $1.23 million ETH contracts valued at $2.3 billion will expire on Deribit Exchange. Some analysts predict that the Bitcoin price rally could help breach the $31,150 mark, a 5% jump from the current level. This target price mirrors the peak reached during the March 2023 rally when the US regional banking crisis dominated the financial markets.
However, while the numbers might look promising, it is essential to remain cautious. The outcome of the quarterly expirations could also result in a downturn rather than an upswing, depending on the market’s reaction. Additionally, regulatory actions like the ones against Coinbase and Binance have the potential to negatively impact the market in the long run.
The volatile nature of cryptocurrencies makes every prediction susceptible to change, as market conditions can quickly shift. The optimism surrounding the recent rally should be tempered with a certain degree of skepticism to avoid becoming overconfident in continuously rising crypto asset prices.
In conclusion, the upcoming expiration of a large number of Bitcoin and Ethereum options can potentially lead to increased volatility in the market. The recent crypto rally has been impervious to legal challenges faced by prominent exchanges, but investors should remain vigilant and understand the risks involved. With a rapidly changing crypto landscape, conducting thorough market research becomes even more crucial, as the market can be mercurial, and one’s personal financial risk must always be taken into account.
Source: Coingape
