- Crypto markets have experienced a slight decline this week, following the US Securities and Exchange Commission’s approval of spot Ethereum exchange-traded funds.
- Volatility is expected to increase as $4.7 billion in Bitcoin options contracts are set to expire on May 31.
- According to Deribit, the 69,200 contract expiry is significant compared to last week’s event, as month-end derivatives activities usually are.
Explore the latest developments in the crypto market, including the impact of Bitcoin options expiry and the outlook for Ethereum futures.
Bitcoin Options Expiry
The put/call ratio for this tranche of Bitcoin options is 0.61, indicating a higher number of calls (long contracts) than puts (short contracts). The max pain point, where most losses will be incurred, is around $65,000, which is $3,500 lower than the current spot prices.
There is significant open interest (OI) at long positions, with strike prices at $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 most OI at $519 million, suggesting that derivatives traders remain bullish on Bitcoin and anticipate higher prices.
The total OI notional value for all outstanding Bitcoin options contracts is a staggering $19 billion.
Ethereum Contracts Expiry
In addition to the substantial Bitcoin options expiry, there are around $3.7 billion in notional value Ethereum contracts expiring. The 910,000 contracts have a put/call ratio of 0.84, indicating a more balanced distribution between long and short positions compared to Bitcoin contracts.
Ethereum futures aggregated open interest has been hovering near all-time high levels this week at around $17 billion, driven by speculation around the spot ETF decision.
Crypto Market Outlook
Spot markets rarely react to options expiry events, but today’s event is particularly significant. Total market capitalization has remained relatively flat at $2.68 trillion. Over the past 12 days, crypto markets have shown minimal movement.
Bitcoin saw a modest increase of 1.2% on the day, trading at $68,489 at the time of writing, while Ethereum experienced a slight decline, trading at $3,751. Most altcoins remained in the red, continuing their declines from the past few days, with meme coins taking a particularly larger hit.
Conclusion
The upcoming Bitcoin options expiry and the substantial Ethereum contracts expiry are poised to introduce significant volatility into the crypto markets. While the overall market capitalization has remained stable, the outcomes of these expiries could influence future price movements. Traders and investors should stay informed and prepared for potential market shifts as these events unfold.
