The Bitcoin and crypto market eagerly observed the expiry of the quarterly BTC and ETH options today (at 8:00 am UTC / 4:00 am EST). It was the second largest in history with a volume of 159,000 BTC options and 1.25 million ETH options with a total value of almost $7 billion.
The market was expecting a sharp increase in volatility, but it failed to materialize. In the run-up, the BTC price briefly spiked as high as $31,300 before seeing a pullback towards $30,700. The event has thus pretty much become a nothing burger.
Options analysts at Greeks.Live confirmed a few minutes ago that the quarterly expiration has been completed, with more BTC block calls being traded in the last few days, mainly to close and roll positions at the end of the quarter, with ETH being mainly in the order book, adding:
With the quarterly expiry, the market has seen a release of positions that have built up in recent months, and options could see a larger shift if the market supports it in July.
Although volatility levels have risen this month and market makers are happy to actively buy positions, the downward trend in major term IV is very much in evidence amidst the strong selling pressure from quarterly delivery.
Today’s daily close could become extremely important for the Bitcoin price. Today is month-end, quarter-end and the Personal Consumption Expenditure (PCE) price index, the US Federal Reserve’s preferred inflation gauge, will be released at 8:30 am EST (12:30 pm CET). On Tuesday, the U.S. market is closed for the Fourth of July, Independence Day.
The Personal Consumption Expenditure (PCE) price index is preferred by the Fed because it provides broader coverage of consumer spending, includes chain weighting to accurately track behavioral changes, accounts for the substitution effect, and uses comprehensive data sources. The PCE is therefore considered a more flexible and representative indicator of inflation compared to other indexes such as the Consumer Price Index (CPI).
While headline CPI data have looked extremely good in recent months, core inflation has been shown to be very sticky. A lot of focus today will therefore be on core PCE. The expectation for PCE inflation is 3.9% and for core PCE 4.7% year-over-year. A surprise to the downside has the potential to provide a bullish boost to both the traditional financial market as well as the Bitcoin and crypto markets.
As renowned analyst @rektcapital writes via Twitter, BTC is positioning itself for a monthly close above a resistance that had rejected the price for the past three months. Currently, BTC is holding above the same level (black). Thus, the monthly as well as the quarterly close could be an extremely bullish harbinger for July.
Analyst @tedtalksmacro recently published an analysis about Bitcoin’s historical performance via Twitter. The result may suggest that the upcoming Monday, July 3, is the best option for a Bitcoin buy, at least historically.
As the analyst noted, July has been the best performing month since October 2009. However, the data is skewed due to a 10x in July 2010. Taking only the last five years of data, the best performing month is October, closely followed by July.
On a weekly basis, Mondays are the best day to buy and hold BTC. This assumes that buyers do not hold BTC on any day other than the nominated one, as the analyst evaluated.
At press time, the Bitcoin price hovered below the $31,000 resistance zone, trading at $30,856.
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