The impending $4.7 billion Bitcoin (BTC, currently valued at $30,405) monthly options expiration on June 30 could prove pivotal, potentially cementing the $30,000 price point as a sturdy base for further upward traction.

Bitcoin’s Yearly Highs: What’s Driving the Rally?

A multitude of analysts attribute Bitcoin’s recent surge beyond $27,000 to the pending spot Bitcoin exchange-traded fund (ETF) applications from significant players like BlackRock and ARK Invest.

This news has stoked the anticipation for Grayscale’s potential transformation of its Grayscale Bitcoin Trust into a Bitcoin ETF.

$31,000: A Temporary Ceiling for Bitcoin?

However, Bitcoin pessimists may look to exploit macroeconomic and regulatory challenges, including exchanges’ enforcement of compulsory Know Your Customer (KYC) policies.

On June 28, KuCoin declared an imminent KYC system enhancement as part of a broader effort to comply with international Anti-Money Laundering regulations.

Worries are mounting regarding the pressure from miners’ sales, with the network hash rate hitting 400 exahashes per second. Analytics company Glassnode reported an all-time high in the percentage of BTC revenue that miners sent to exchanges in the past week, a total of $128 million. Interestingly, this trend mirrors the peaks observed during the 2021 bull run when miners cashed in their profits.

Moreover, during the European Central Bank Forum on Central Banking in Portugal, Federal Reserve Chair Jerome Powell cautioned that most policymakers anticipate two additional rate hikes this year. Based on the CME’s FedWatch Tool, the market is pricing in an 82% probability of a 25-basis-point interest rate hike on July 26.

On June 27, Bitcoin’s price once again brushed against the $31,000 barrier, but the resistance proved more formidable than expected. The ensuing drop to $30,000 suggests the likelihood of near-term sideways trading as investors assess the implications of the Fed’s proposed interest rate hikes.

This tightening outlook for the global economy might elucidate why certain Bitcoin traders chose to realize profits, thereby capping the price growth.

$4.7 billion Unattainable – Bulls’ Overconfidence?

The open interest for the June 30 options expiration stands at $4.7 billion. However, the actual figure might be smaller as bulls overestimated, anticipating BTC price levels of $32,000 or higher. This overly positive sentiment surfaced after Bitcoin’s price rallied 25.5% between June 15 and June 23, testing the $31,000 resistance.

The 0.56 put-to-call ratio reveals the discrepancy between the $3.1 million in call (buy) open interest and the $1.7 million in put (sell) options.

However, if Bitcoin’s price hovers near $30,500 at 8:00 am UTC on June 30, only $630 million worth of these call (buy) options will be relevant. This divergence arises because the privilege to buy Bitcoin at $31,000 or $32,000 loses its value if BTC trades below those levels at expiration.

Bears Target Below $30,000 to Level the Playing Field

Outlined below are the four most probable scenarios given the current price trends. The quantity of options contracts available on June 30 for call (bull) and put (bear) instruments differs depending on the expiration price. The imbalance favoring each side represents the hypothetical profit.

• Between $28,000 and $29,000: 7,200 calls vs. 16,200 puts. Bears hold the reins, reaping $250 million.
• Between $29,000 and $30,000: 13,000 calls vs. 12,600 puts. The outcome is balanced between put and call options.
• Between $30,000 and $31,000: 1,500 calls vs. 2,100 puts. The net result tilts towards call options by $440 million.
• Between $31,000 and $32,000: 3,300 calls vs. 800 puts. The net result favors call options by $670 million.

This crude approximation treats call options as bullish wagers and put options exclusively as neutral-to-bearish trades. Nevertheless, this simplification overlooks more complex investment tactics.

For instance, a trader might have sold a put option, effectively gaining positive Bitcoin exposure above a certain price. Regrettably, estimating this effect is not straightforward.

Ultimately, the decision hinges on whether BTC price pessimists are willing to risk exposure while a potential spot Bitcoin ETF approval undergoes SEC analysis.

While it’s impossible to anticipate the potential inflow or the timing of such an event, it does provide an opportunity for bulls to lock in a $440 million profit by maintaining Bitcoin’s price above $30,000 in the near term.