Bitcoin (BTC) and Ethereum (ETH) Face Volatility as Monthly Options Expiry and PCE Inflation Data Approach

• The crypto market is bracing for significant events, including the release of PCE inflation data and a massive crypto options expiry.
• Wall Street anticipates that both annual and core PCE inflation figures will be lower than expected, potentially signaling a cooling inflation trend.
• Bitcoin and Ethereum are facing a substantial options expiry, which could introduce significant volatility to their prices.

Stay updated on the latest crypto market developments as Bitcoin and Ethereum prepare for a crucial options expiry amidst anticipated inflation data.

Markets Focus on Fed’s Preferred Gauge PCE Inflation

Traders are now focusing on the PCE and core PCE inflation figures, the U.S. Federal Reserve’s preferred gauge to measure inflation. The U.S. Bureau of Economic Analysis is set to release key inflation data, which could determine market direction for weeks. Wall Street expects PCE inflation to come in lower than expected figures. The market estimates annual PCE inflation to remain at 2.7%, similar to last month, while the month-over-month PCE inflation is also expected to stay at 0.3%.

On the other hand, annual and monthly core PCE inflation are projected to remain at 2.8% and 0.3%, respectively. While stagnant actual PCE inflation figures will be positive for the markets, hinting at cooling inflation, Wall Street banks predict an inflation pivot that could trigger a market rally.

Bitcoin and Ethereum $8.2 Billion Options Expiry

Over 69,000 Bitcoin options, valued at $4.7 billion, are set to expire on Deribit on May 31. The put-call ratio is 0.61, indicating a recent rise in call open interest as the monthly expiry approaches. The max pain point is $66,000, which is below the current price, suggesting potential volatility and a price pullback on the expiry day.

Moreover, 909,000 Ethereum options, with a notional value of $3.4 billion, are set to expire, with a put-call ratio of 0.60. The max pain point is $3,300. Currently, the ETH price is trading above this point, providing traders with more room to book profits.

Conclusion

The crypto market is on edge as it awaits critical inflation data and a significant options expiry for Bitcoin and Ethereum. While Wall Street anticipates lower-than-expected inflation figures, the substantial options expiry could introduce notable volatility. Traders are closely monitoring the US dollar index and treasury yields for confirmation of a potential rally. As the market navigates these events, the coming days will be crucial in determining the future direction of crypto prices.