Bitcoin
How will crypto markets react to the massive $4.7 billion Bitcoin options expiry today?
Crypto markets fell slightly this week as sentiment waned following last week’s U.S. Securities and Exchange Commission approval of spot Ethereum exchange-traded funds.
However, volatility could increase when a staggering $4.7 billion worth of notional value Bitcoin options contracts expire on May 31.
The contract expiration of 69,200 is huge compared to last weeks event, as end-of-month derivatives activities typically are, according to for Deribit.
Bitcoin Options Expiration
The put/call ratio for this tranche of Bitcoin options is 0.61. This means there are more calls (or long contracts) expiring than there are puts (or puts). The point at which most losses will occur, called the maximum pain point, is about $65,000, which is $3,500 lower than current spot prices.
There are many open contracts, or contracts that have not yet expired, on long positions, including strike prices of $70,000, $75,000, $80,000, and even $100,000, where the OI is $886 million.
On the short side, the $60,000 strike price has the highest OI at $519 million. This suggests that derivatives traders remain bullish on Bitcoin and expect higher prices.
The total notional value of OI for all outstanding BTC options contracts is a staggering $19 billion.
In addition to the current large batch of Bitcoin options, there are about $3.7 billion worth of notional value Ethereum contracts expiring. The 910,000 contracts have a put/call ratio of 0.84, with longs and shorts more evenly matched than BTC contracts.
Additionally, aggregate Ethereum futures open interest has been hovering near all-time high levels this week at around $17 billion, driven by speculation surrounding the spot ETF decision.
Crypto Market Outlook
Spot markets rarely react to option expiration events, but today’s is important. Total capitalization remained relatively stable on the day at $2.68 trillion. In fact, crypto markets have moved very little over the last 12 days or so.
Bitcoin is up 1.2% on the day, trading at $68,489 at the time of writing, while Ethereum is falling slightly to $3,751.
Altcoins were still mostly in the red, adding to their declines in recent days, and meme coins were particularly bullish. bigger beat.