On May 31, a significant number of Bitcoin and Ether options contracts expired, with a combined value of $8.2 billion. This expiration event has historically been associated with increased volatility in the cryptocurrency market.
According to data from Derbit, the put/call ratio for the expired Bitcoin options was 0.61, indicating that more long contracts were expiring compared to short contracts. On the other hand, Ether options had a put/call ratio of 0.46.
The put/call ratio is a technical indicator that reflects trader sentiment. A ratio below 0.7 suggests a strong bullish sentiment, while a ratio above 1 indicates a strong bearish sentiment.
For Bitcoin, the maximum pain point, or the price at which most losses occur for leverage traders, is $66,000. As for Ether, the max pain point is $3,300. Currently, Bitcoin is trading at $68,210, which is $2,000 above its pain point, while Ether is trading at $3,738, more than $400 above its pain point.
Looking at the open interest (OI) for Bitcoin options, there are millions of dollars in long positions with strike prices ranging from $70,000 to even $100,000. Open interest refers to the total number of outstanding derivative contracts that have not been settled. Notably, there are traders who have placed significant long positions on Bitcoin with a target price of $100,000, with $886 million in open interest at this strike price. The total notional value of all outstanding Bitcoin options contracts stands at $19 billion.
In May, the approval of the spot Ether ETF by the Securities and Exchange Commission (SEC) was a highly anticipated event that had a bullish impact on the cryptocurrency market. However, the SEC only approved the 19b-4 filing, which delayed the actual listing for trading. Since then, the market has experienced a sideways movement, with Ether struggling to break above $4,000 and Bitcoin facing resistance at the $70,000 price level. Currently, the market is undergoing a correction after the recent bullish surge.
In conclusion, the expiration of Bitcoin and Ether options contracts has brought about increased volatility in the cryptocurrency market. Traders are closely monitoring the market sentiment indicated by the put/call ratio and the open interest at various strike prices. Additionally, the delayed listing of the spot Ether ETF has contributed to the recent bearish momentum in the market.