Bitcoin Derivatives and ETF Outflows Raise Confidence Concerns 

On Friday, Bitcoin fell to $114,013 and traded at $113,383. This decline triggered $200 million in liquidations of leveraged long positions, damaging trust in BTC derivatives markets. Moreover, prices have failed to hold above $120,000 for three consecutive weeks, leading to a loss of confidence among investors. 

Normally, monthly Bitcoin futures trade at a 5–10% premium over spot prices. The current 6% premium is the lowest in the past four weeks, indicating a decline in demand for leveraged bullish positions. While institutional interest remains high, market confidence is visibly lower. 

On July 31, spot Bitcoin ETFs saw a net outflow of $115 million, ending a five-day streak of net inflows. This further impacted investor sentiment. Meanwhile, Strategy (MSTR) announced a $4.2 billion stock offering on Thursday, which could help prevent large-scale Bitcoin sales and stabilize the derivatives market. 

Bitcoin’s Correlation with Equities Increases 

Bitcoin is only 7% below its record high of $123,182 from mid-July. Meanwhile, gold prices remain steady around $3,350. Once viewed as digital gold, Bitcoin has recently shown a strong correlation with equities amid global trade tensions. This correlation has risen above 70% over the past three weeks. 

As a result, Bitcoin now behaves more like a high-risk tech stock rather than a safe-haven asset. Its market capitalization is comparable to that of Amazon and Google, highlighting the impact of U.S. tariff disputes and increased money supply on financial markets. 

Investors have shifted to cash and short-term Treasury bonds due to a weakening labor market. Demand for 1-year U.S. Treasury notes reached a three-month high, driven by revised employment data and an increase in July’s unemployment rate to 4.2%. 

BTC Options Between Neutral and Bearish Sentiment 

It’s possible to monitor whether Bitcoin whales and market makers are reducing their leveraged long positions via the options market. In bearish conditions, put options typically carry a 6% or higher premium over call options. Currently, this premium difference is around 5%. 

The delta skew of options has shifted from bullish to neutral-to-bearish since July 18. Additionally, the cost of protecting against a drop below the $114,000 support level has risen. This indicates decreasing confidence in Bitcoin’s ability to hold that level.

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don’t forget to follow us on our Telegram, YouTube, and Twitter channels for the latest news and updates.

The post Why Is Bitcoin Dropping? ETF & Options Market Signals appeared first on Coin Engineer.

Market data shows the “max pain” level at $106,000. This price point is where most call and put options become worthless, making it the most advantageous level for sellers. The spot price is currently trading around $109,044, marking a 0.2% increase from yesterday. 

Put/Call Ratio Balanced, Sharp Drop in Volume 

Recent data shows the put/call ratio for this week’s options contracts is 1, indicating an equal distribution between bullish and bearish positions. However, with the price still $3,000 above the max pain level, there’s a risk of downward pressure as expiry nears. 

Trading volume fell by 21% in the last 24 hours to $28.9 billion. In a low-volume market environment, such as during options expiry, price sensitivity increases, potentially causing sharp fluctuations. The closing of large institutional options positions could push the price toward the $106,000 level. 

Options Expiry Alert

After last week’s massive $17B expiry, tomorrow brings a quieter setup, but still sizable.$BTC: $2.98B notional | Put/Call: 1.01 | Max Pain: $106K BTC now trades above $109K, will it hold into expiry or snap back toward max pain?$ETH: $584M notional… pic.twitter.com/CvFl5Ngviq

— Deribit (@DeribitOfficial) July 3, 2025

Ethereum Contracts Bring Total Expiry Value to $3.6 Billion 

Additionally, about 220,000 Ethereum options contracts are also expiring. These Ethereum options represent a total nominal value of $584 million. Market data shows the max pain level at $2,500. On the ETH side, the put/call ratio stands at 1.28, indicating a stronger bearish sentiment in the market. 

Combined, Bitcoin and Ethereum option contracts expiring on Friday have a total nominal value of around $3.6 billion. This volume is significant enough to influence the direction of liquidity in the derivatives market. 

Meanwhile, crypto derivatives provider Greeks Live noted in a market update that investors are “disappointed by stagnant prices and high volatility.” The firm also emphasized that investor sentiment is shifting more strongly toward the downside. Moreover, open interest (OI) above $1.5 billion exists at the $115,000, $120,000, and $140,000 levels, signaling that investors remain optimistic in the longer term. 

Also, you can freely share your thoughts and comments about the topic in the comment section. Additionally, please follow us on our Telegram, YouTube and Twitter channels for the latest news and updates.

The post Massive Expiry Day for Bitcoin and Ethereum Options Today!  appeared first on Coin Engineer.