Since this week, the crypto market has maintained a steady upward momentum, fueled by Ethereum’s robust performance and SEC ETF approval. However, an imminent event has captured everyone’s attention – the expiration of Bitcoin options contracts worth a staggering $1.4 billion in notional value on May 24.
Based on Derbit metrics, the expiration of 21,000 Bitcoin options contracts on May 24 is seen as a small event. Thus, it leads up to a much bigger event on May 31, when $4.3 billion worth of Bitcoin options contracts will expire.
Bitcoin and Ethereum Options Expiry: Insights into Market Sentiment
For the Bitcoin options contracts expiring this week, the put/call ratio stands at 0.88.
For context, this put/call indicator provides information on the current market sentiment. So, this current ratio suggests a relatively balanced distribution between bullish and bearish sentiment.
According to Deribit, open interest data shows that many investors are opening long positions on Bitcoin prices. Many contracts are also set to benefit if prices go higher.
At the $70,000 strike price, the Open Interest stands at around $830 million, while at the $100,000 level, it reaches a substantial $843 million. Interestingly, the $60,000 strike price has the highest OI for put contracts, with $388 million.
Ethereum Options: Bullish Momentum Ahead of SEC Deadline
In the Ethereum options market, approximately 354,000 contracts with a notional value of $1.5 billion are set to expire today. The put/call ratio of Ethereum stands at 0.59, signaling a higher concentration of call options, reflecting bullish sentiment among traders.
Notably, derivatives traders have been predicting a bullish price surge for Ethereum in anticipation of the SEC deadline. Investors have put about $515 million into bets that Ethereum will reach $4,000.
Massive Options Expiry, Crypto Markets Brace for Impact
About $3 billion worth of Bitcoin and Ethereum options contracts will expire today. However, this is not expected to cause significant price movement. Similar events have not had a strong impact on the overall cryptocurrency market in the past.
Currently, the total cryptocurrency market capitalization has recorded a 3.6% decline, standing at $2.52 trillion. This dip can be primarily attributed to a 3.55% decrease in Bitcoin prices.
On the other hand, Ethereum, the second-largest cryptocurrency by market cap, is battling volatility following yesterday’s highly anticipated SEC decision.
However, the market has stabilized, with Ethereum trading at around $3,700. According to CoinMarketCap, some cryptocurrencies like Chainlink (LINK), Lido DAO (LDO), and Ondo (ONDO) have also gone up.
Unfortunately, others, such as Solana (SOL), Dogecoin (DOGE), and Tron (TRX), have faced losses. Despite the looming options expiry and its potential impact, market participants remain cautiously optimistic.
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