Deribit, the leading exchange in the derivative market, experienced a significant event on May 31. A total open interest of $4.7 billion in Bitcoin and $3.5 billion in ETH expired at 8:00 am UTC. As a result, the price of BTC fell by 1.8%, while ETH recorded a 3% decline within four hours, indicating a bearish pressure.
According to Deribit data, 69,000 Bitcoin (BTC) options expired with a Put Call Ratio of 0.37. This suggests a bullish sentiment as investors favored call options. A low PCR signifies market optimism and significant interest in BTC options.
The put/call ratio (PCR) is a technical indicator that reflects trader market sentiment. A PCR below 0.7 is considered a strong bullish sentiment, while a PCR above 1 indicates a strong bearish sentiment.
The maximum pain point for Bitcoin, where leverage traders suffered the most losses, is $68,200. For Ether (ETH), the maximum pain point is $3,300. This pain point represents the price at which asset holders experience the most loss. Currently, BTC is trading at $68,210, $2,000 above its pain point, and ETH is trading at $3,738, more than $400 above its pain point.
After option expiry, sharp price movements often occur, but the impact is temporary. The market typically bounces back the next day, offsetting the initial volatility.
The approval of the spot ETH ETF by the Securities and Exchange Commission (SEC) in May was a significant and bullish event for the crypto market. ETH prices rose 20% in anticipation of the approval. However, the SEC only approved the 19b-4 filing, delaying the actual listing for trading.
Since the ETH ETF approval, the crypto market has been experiencing a bearish sideways movement. ETH has been stuck below $4,000, and BTC has been below the $70,000 price barrier. Currently, the market is undergoing a correction from the bullish surge of the past two weeks.