Will Cryptocurrency Markets Rise When $1.4 Billion worth of Bitcoin$BTC $ Options Expire?
Cryptocurrency markets maintained their gains this week, supported by Ethereum and the US Securities and Exchange Commission's approval of ETFs. However, $1.4 billion worth of Bitcoin options contracts will expire today, May 24.
This expiration, at 21,000 contracts, is a relatively small event compared to the expiration at the end of the month on May 31, when a whopping $4.3 billion worth of options will expire, according to Deribit.
The put/call ratio for this week's Bitcoin options contracts is 0.88, meaning that sellers of long and short contracts are relatively equal with few more calls expiring than puts. The maximum pain point, or the price at which most blue chip buyers lose, is $67,000.
Al Tawal controls open interest (OI) at around $830 million at a strike price of $70,000. Higher strike prices also have a lot of open interest, about $843 million at $100,000, according to Deribit. The strike price of $60,000 has the highest amount of open interest for put contracts at approximately $388 million. Open interest refers to the number or value of contracts that have not yet been settled, so bulls are anticipating much higher BTC prices.
In addition to today's Bitcoin options, there are about 354,000 Ethereum contracts expiring today. These contracts have a theoretical value of $1.5 billion and a put/call ratio of 0.57 with more calls expiring than puts. Derivatives traders have been speculating about ETH in the run-up to the long-awaited SEC deadline. There is about $515 million in open interest at the $4,000 strike price as bulls expect more momentum.
Cryptocurrency derivatives software provider Greeks Live commented: “BTC has retreated as expected, against very strong support for the ETH price, with the weekly IV weight of ETH currently exceeding 100%, while the weekly IV weight of BTC is currently at 50%.”
Impact of the cryptocurrency market
Nearly $3 billion worth of BTC and ETH options will expire today, but the impact on spot markets is typically muted. The total market capitalization fell by 1.3% to $2.68 trillion, mainly due to a 2.3% decline in Bitcoin prices with the asset falling to $67,400 at the time of writing.
Ethereum faced extreme volatility before yesterday's decision but now stands calmly at $3,730. Altcoins were a mixed bag with gains for Chainlink (LINK), PEPE, and Ethereum Classic (ETC), but losses for Solana (SOL), Dogecoin (DOGE), and $Toncoin (TON).
