Judging from the disk, today's BTC daily level may mainly show a sideways pattern. From March 10 to March 22, the market experienced a long-short duel, and it was obvious that the bulls won, while the bears chose to surrender. In recent days, we have continued to observe the changes in the market. April to June is the second quarter (Q2). Many people speculate that there may be a sharp correction, but I personally don't think it will happen. The reason is that there is a production cut from April to May, and the market has already responded. If the market is smashed at this time, it will only be done to manipulate the contract. Therefore, considering various factors, the second quarter is likely to start with a sideways pattern. At the same time, altcoins are also expected to usher in a good market.
$15 billion in options are about to be delivered
At 08:00 UTC on Friday, crypto options trading platform Deribit will see the expiration and delivery of quarterly contracts with a total value of $15.2 billion. Among them, Bitcoin options account for $9.5 billion, accounting for 62% of the total notional open interest to be settled, and the rest is Ethereum options.
Data from Deribit shows that this expiration of contracts with a total value of $15 billion is the largest in the history of the platform, and will liquidate 40% and 43% of the total notional open interest of Bitcoin and Ethereum of the corresponding terms. Notional open interest refers to the sum of the dollar value of active contracts at a specific moment. On Deribit, each option contract represents 1 BTC or 1 ETH, respectively. The platform has a share of more than 85% of the global crypto options market. A call option is a financial contract that allows the buyer to buy an asset at a fixed price in the future without mandatory obligations, while a put option provides the right to sell an asset.
Market volatility may occur
Luuk Strijers, chief commercial officer at Deribit, noted that a large number of options will expire as in-the-money (ITM), which could put upward pressure on the market or trigger volatility. An in-the-money call option (ITM) has a strike price that is lower than the current market price of the underlying asset. At expiration, an ITM call option gives the buyer the right to purchase 1 BTC at a strike price that is lower than the market price, thereby making a profit. An in-the-money put option has a strike price that is higher than the current market price of the underlying asset. At a market price of approximately $70,000, $3.9 billion worth of Bitcoin options will expire as in-the-money options, accounting for 41% of the total quarterly open interest of $9.5 billion to be settled. Similarly, 15% of ETH's total quarterly open interest of $5.7 billion will expire as in-the-money options.
“The maximum pain point levels are much higher than usual this time, as shown by the lower maximum pain point levels, mainly due to the recent price increase. The high number of in-the-money options expiring could trigger potential upward pressure or market volatility,” Strijers explained. The maximum pain point for quarterly expiring options for BTC and ETH is set at $50,000 and $2,600, respectively. The maximum pain point refers to the point at which the option buyer could suffer the maximum loss. According to this theory, the seller of options, usually institutions or traders with sufficient funds, will try to maintain the price near the maximum pain point to inflict the maximum loss on the option buyer. In the previous bull run, the prices of Bitcoin and Ethereum often adjusted to their respective maximum pain points, but the prices tended to rise again after the options expired. Strijers pointed out that a similar mechanism may still be at work, saying: “As options with lower maximum pain points expire, the market may experience upward pressure.”
Hedging transactions by dealers or market makers will increase
David Brickell, head of international distribution at Toronto-based cryptocurrency trading platform FRNT Financial, noted that hedging by traders or market makers could lead to increased market volatility. Brickell noted in the report: “However, market makers’ gamma positions had the most significant impact on activity. Traders were short approximately $50 million in gamma, with the bulk concentrated at the ~$70,000 strike price. Subsequently, Gamma positions will become even more important as expiration approaches, and mandatory hedging activity will increase volatility around $70,000, causing larger price swings around this level."
Gamma is used to measure the rate of change of Delta (the sensitivity of option prices to changes in the price of the underlying asset), reflecting the amount of Delta hedging required by market makers to maintain market neutral exposure when the price of the underlying asset changes. In order to provide liquidity in the order book and make a profit from the bid-ask spread, market makers need to perform Delta hedging to maintain market neutral exposure.
When market makers hold short gamma or short option positions, they hedge by buying low and selling high, and this hedging behavior can lead to volatile markets.
The $69,000 support level is the most critical
Some traders have raised warnings, saying that if Bitcoin falls below the $69,000 price level in the coming days, the entire market could fall further. Alex Kuptsikevich, senior market analyst at FxPro, noted in a report that traders' short-term focus will be on whether Bitcoin can retest Tuesday's intraday low near $69,500. If the price falls below that level, it could mean that the market will enter a longer-term correction phase.
Bruce Powers, a cryptocurrency analyst, noted that over the past four days, the price of Bitcoin has been encountering resistance near the 78.6% Fibonacci retracement level, facing resistance at 71,790. Trading in recent days has remained above the 20-day moving average. Although the uptrend remains, the bearish divergence of the relative strength index (RSI) suggests that a further pullback may occur. A break above this week's high of 71,290 would trigger a continuation of the bullish trend, with an initial new high target of about 77,660, which is determined by two Fibonacci levels.
Today, we recommend several potential coins:
AI Section:
The two leading projects WLD and ARKM have been silent for a long time. In the last live broadcast, we also said that the turning point of WLD will be at least in mid-April, so we will continue to wait patiently. However, the three projects of FET, AGIX and OCEAN have recently merged into one big project. We will focus on observing them in the later stage. All three of them are old projects. FET has been pulling but is not as famous as WLD in the market. Now the leeks are not stupid. The market will not pay for good products, so we will pay attention to the merger of the three of them in the future.
In the pledge section:
Recently, PENDLE is undoubtedly the leader, followed by ETHFI. The popularity is still there, but it needs to be adjusted;
MASK：
I have led my brothers to achieve 30% profit, and continue to see 7 dollars;
UNO:
The price has been trading sideways around $3 for a month, and the market outlook remains bullish with a chance of breaking through previous highs!
That’s all for today’s article. We are currently in a bull market, and things are surging. We will share something every day. #非农数据 #大盘走势
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