Bitcoin bulls are gaining momentum, setting their sights on a $110,000 target as the market approaches a substantial $20 billion monthly options expiry on June 27. This expiry event is expected to be a key factor influencing Bitcoin's price in the short term, with analysts closely monitoring market sentiment and potential volatility.
The approaching options expiry, one of the largest quarterly settlements this year, has already begun to shape expectations across cryptocurrency markets. Data indicates that 141,271 Bitcoin options contracts are set to expire, representing over 40% of the total open interest on Deribit, a major exchange for crypto options. With each contract equaling one Bitcoin, the total notional value of these expiring contracts amounts to over $14 billion based on current prices.
Currently, call options (buy options) hold a higher open interest at $11.2 billion compared to put options (sell options) at $8.8 billion. However, a significant portion, $7.1 billion, of put options have strike prices at or below $101,000. This indicates that the recent price recovery has provided a crucial opportunity for bulls to establish stronger support around the $105,000 level, which could prove decisive in pushing Bitcoin towards a new all-time high.
Several factors appear to be contributing to the bullish sentiment. A more dovish stance from U.S. Federal Reserve Chair Jerome Powell has instilled confidence in the market. During his recent testimony before the House Committee on Financial Services, Powell suggested that interest rate cuts could occur sooner if inflation remains subdued. Echoing this sentiment, other Fed officials have hinted at potential rate cuts as early as the July policy meeting, citing recent data indicating controlled inflationary pressures.
Concurrently, the S&P 500 index has reached its highest level in over four months. Bitcoin bulls interpret this stock market performance as an early signal that investors currently in short-term government bonds may soon shift towards riskier assets like Bitcoin in search of higher returns. This theory is further supported by analysts projecting a modest 5% revenue growth for the S&P 500 in 2025. Even if central banks refrain from expanding the monetary base in the near term, declining yields on fixed-income instruments could still drive Bitcoin's upward trajectory.
As the options expiry approaches, analysts note that the most effective scenario for bears would involve increasing market uncertainty, possibly triggered by a sharp price decline. However, the current bullish positioning suggests that traders are anticipating further gains.
The put-call ratio, which compares the volume of put options to call options, is a key indicator of market sentiment. A higher ratio generally suggests a bearish outlook, while a lower ratio indicates bullishness. While the put-call ratio has seen an increase, some analysts believe that much of the put activity is driven by "cash-secured puts," a strategy where investors sell put options while holding sufficient capital to purchase Bitcoin if prices fall and the options are exercised. This strategy allows investors to generate yield and may not necessarily indicate a purely pessimistic outlook.
Despite the large volume of call options, a significant portion is expected to expire worthless. Deribit data indicates that nearly 20% of the call options are currently "in the money," with strike prices below the current spot level of around $106,000.
Overall, the Bitcoin market is exhibiting signs of bullish strength ahead of the $20 billion monthly options expiry. A combination of factors, including positive macroeconomic signals, dovish Fed policies, and increasing institutional interest, are fueling optimism and driving price targets higher. While the options expiry could introduce short-term volatility, the underlying sentiment suggests that Bitcoin bulls are well-positioned to maintain their edge and potentially reach the $110,000 target.
