Key Points
- Bitcoin and Ether options worth roughly $2.7 billion are due to expire on May 24, providing insight into crypto market sentiment.
- 21,000 Bitcoin options and 350,000 Ether contracts are set to expire, indicating a balance between buyers and sellers.
The crypto market is bracing for the expiration of Bitcoin and Ether options worth about $2.7 billion on May 24. This event is expected to offer valuable insights into the sentiments of the crypto market.
Bitcoin Options Expiry
Greeks.live reports that 21,000 Bitcoin (BTC) options are on the brink of expiration. The put/call ratio stands at 0.88, suggesting a near-even balance between buyers and sellers, with a slight lean towards call options. The maximum pain point, the price at which most option buyers would incur losses, is pegged at $67,000. This represents a nominal value of $1.4 billion.
While the impending expiration of the 21,000 contracts is significant, it is dwarfed by the larger event on May 31. On this date, options worth an astounding $4.3 billion are set to expire.
Market Sentiment and Future Predictions
Data shows that long positions dominate open interest (OI), with a hefty $830 million tied to the $70,000 strike price. Higher strike prices also have substantial OI, notably $843 million at the $100,000 mark, suggesting a bullish tendency among traders. The $60,000 strike price, with $388 million in open interest, is the most notable for put contracts.
This substantial OI indicates a large number of unsettled contracts, suggesting that bulls anticipate much higher Bitcoin prices.
The options expiry event also impacts Ethereum, with a significant 350,000 Ether (ETH) contracts due to expire. These contracts represent a notional value of $1.3 billion. The put/call ratio of 0.58 and a max pain point of $3,200 suggest a slightly bullish tone, with more call options expiring than put options.
Ethereum recently led the crypto rally, inspired by ETF progress, with a one-day 20% rise. The short-term options implied volatility (IV) reached 150% at one point, significantly higher than Bitcoin’s current IV for the same period. However, maintaining high IV levels for each major term is challenging, suggesting that calendar spreads may be a better choice. Meanwhile, Bitcoin appears more balanced between long and short positions, with stronger selling call forces.
