Bitcoin faces selling pressure as it drops to $65,742 ahead of its upcoming halving event, with analysts expecting a period of correction and consolidation. The broader crypto market also sees losses, with ether, Solana's SOL, and dogecoin registering larger drops. Ethena Labs opens claims for its new governance token, ENA, while Deribit's Dubai-based unit wins a conditional virtual asset provider license, allowing it to operate as a virtual asset exchange for spot and derivatives trading once all conditions are met.
The notional open interest in bitcoin and ether options contracts on Deribit has reached $20.64 billion, nearing the peak recorded in November 2021. This milestone reflects the growing interest in options trading and the overall market expansion. Additionally, Goldman Sachs predicts that Ethereum's Dencun upgrade, expected in Q1 2024, will enhance the blockchain's scalability and reduce transaction costs for layer-2 rollups. Meanwhile, FTX founder Sam Bankman-Fried testified in his criminal trial, defending his company's bankruptcy filing. Bitcoin's price has decoupled from Wall Street's tech-heavy index, with a 34% increase since early September.
Bitcoin's sudden rally to two-month highs has spurred demand for calls and boosted activity in the options market. On Wednesday, bitcoin options contracts worth $3.3 billion changed hands across major exchanges, including Deribit. That's the highest single-day notional volume in three months. Call options at strike prices of $30,000, $31,000, $32,000 and $40,000 have been popular among traders in the past 24 hours. The increased demand for options pushed Deribit's bitcoin volatility index, DVOL, to 59.24, the highest since early April.
Bitcoin and Ethereum have remained stable as $3.5 billion worth of options contracts expired this morning. The expiration of Bitcoin options on Deribit had a notional value of $2.26 billion, while Ethereum had $1.25 billion. The low-liquidity market conditions were expected to exacerbate the impact of the options expiration event. The market's attention will now turn toward June, which is currently showing a maximum pain level of $24,000 for Bitcoin and $1,600 for Ethereum. Traders are advised to be careful of more downside on Friday if $25,850 is breached.
