June 4, 2024
Bitcoin News

Bitcoin and Ethereum Options Expiry Triggers Market Volatility

On May 31st, the cryptocurrency market witnessed the expiration of a staggering number of options contracts. 69,000 Bitcoin options worth $4.7 billion and 920,000 Ether options valued at $3.5 billion reached their maturity. This significant event has historically been correlated with heightened volatility in the crypto market, shaping investor sentiment and market dynamics.

Source: GreeksLive

Market Sentiment Reflected in Put/Call Ratio

Analysis of the expired options reveals intriguing insights into trader sentiment. According to Deribit data, the put/call ratio for Bitcoin options stood at 0.61, indicating that more calls, or long contracts, expired compared to puts, or short contracts.

Conversely, Ether options exhibited a put/call ratio of 0.46. This suggests a similar trend but with a slightly stronger bullish sentiment for Ether compared to Bitcoin.

Maximum Pain Points and Open Interest

The concept of maximum pain points, where leverage traders experience the most significant losses, further adds nuance to market dynamics. For Bitcoin, the maximum pain point was identified at $66,000, while for Ether, it stood at $3,300. Currently, both cryptocurrencies are trading above their respective pain points, with BTC at $68,210 and ETH at $3,738.

BTC options all expiration: Open interest by strike price. Source: Deribit

Moreover, millions in open interest are positioned in long positions across various strike prices, including ambitious targets like $100,000 for Bitcoin.

Market Reaction Post-ETH ETF Approval

The recent approval of an Ethereum Exchange-Traded Fund (ETF) filing by the Securities and Exchange Commission (SEC) in May had initially fueled bullish momentum in the crypto market, with ETH prices soaring by 20%.

However, the delay in the actual listing for trading following the SEC’s approval has contributed to a bearish sideways movement in the market. Both Bitcoin and Ethereum are struggling to breach key resistance levels, with the market currently experiencing a correction from the recent bullish surge.

While the crypto market navigates the aftermath of the options expiry and reacts to regulatory developments, investor sentiment and market direction remain uncertain.

Image by vectorjuice on Freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

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