TL;DR
- On May 31, a massive expiration of Bitcoin and Ether options took place, with a combined value of $8.2 billion, causing concern among investors.
- The put/call ratio suggests that more long contracts (calls) expired than short contracts (puts), which could impact market dynamics in the coming days.
- Long positions in BTC futures, with strike prices between $70,000 and $100,000, indicate confidence in a potential price increase.
The crypto market is at a critical juncture, with Bitcoin and Ether options expiring on May 31, with a combined value of $8.2 billion. This situation is historically linked to price volatility and is starting to stir concern among investors.
In detail, 69,000 Bitcoin options valued at $4.7 billion and 920,000 Ether options valued at $3.5 billion expired. The put/call ratio for these expired options indicates that more long contracts (calls) expired than short contracts (puts), which could influence market dynamics in the coming days.
May 31 Options Data
69,000 BTC options expired with a Put Call Ratio of 0.37, a Maxpain point of $66,000 and a notional value of $4.7 billion.
920,000 ETH options expired with a Put Call Ratio of 0.46, Maxpain point of $3,300 and notional value of $3.5 billion.
The crypto market… pic.twitter.com/1yMZymIcYZ— Greeks.live (@GreeksLive) May 31, 2024
One key aspect to consider is the concept of “maximum pain,” which indicates price points at which most leveraged traders will suffer losses. For Bitcoin, this point is at $66,000, while for Ether, it is at $3,300. Currently, BTC is trading at $68,210, just above the “maximum pain” point, while Ether is at $3,738, above its loss threshold.
Bullish Potential for Bitcoin
It’s worth noting that millions of dollars in open interest are associated with long positions in BTC futures, with strike prices ranging from $70,000 to $100,000. This indicates a certain level of investor confidence in a potential price increase in the near future.
On the other hand, the approval of Ethereum ETFs by the Securities and Exchange Commission (SEC) has generated expectations in the market. While initially seen as a bullish event, the delay in the start of operations has affected investor sentiment. Since then, the market has experienced a bearish sideways movement. Both ETH and BTC are struggling to overcome the $4,000 and $70,000 barriers respectively.
We still have to wait for ETH ETFs to start operating, and the impact of options expiration has yet to be felt. We need to stay vigilant for any developments and their direct consequences in the market.
