On May 31, 69,000 Bitcoin options worth $4.7 billion and 920,000 Ethereum options worth $3.5 billion will expire. The expiration of cryptocurrency options contracts has historically been associated with price volatility in the cryptocurrency markets.
According to Derbit data, the put/call ratio for expired Bitcoin (BTC) options is 0.61. This means that there are more calls (or long contracts) expiring than puts (or sales). On the other hand, the put/call ratio for Ethereum (ETH) options was 0.46.
Put/Call Ratio (PCR) is a technical indicator that reflects traders’ market sentiment. A PCR below 0.7 is considered a strong bullish sentiment, while a PCR above 1 is considered a strong bearish sentiment.
Bitcoin’s maximum pain is $66,000 and ETH’s is $3,300.
The maximum pain point at which Bitcoin leveraged traders can suffer the most losses is $66,000. For ETH, the biggest problem is $3,300. BTC is currently trading at $68,210, $2,000 above Pain Point, while ETH is trading at $3,738, more than $400 above Pain Point.
Millions of people have open interest (OI) long positions at strike prices of $70,000, $75,000, $80,000, and even $100,000. Open interest refers to the total number of derivatives contracts that are outstanding.
Several traders have taken long Bitcoin positions with a target price of $100,000. With open interest (OI) at this strike price of $886 million, the number of long positions appears significant. The total notional value of all outstanding BTC options contracts amounts to $19 billion.
Related: Bitcoin price recovers $70,000 as Coinbase BTC supply hits 9-year low.
Hangover after on-site ETH approval
The Securities and Exchange Commission’s (SEC) approval of the spot ETH ETF last May was a significant and optimistic event for the cryptocurrency market. ETH price rose 20% in May in anticipation of approval. However, the SEC only approved the 19b-4 filing, delaying the actual listing.
After the approval of the ETH ETF, the cryptocurrency market showed a downward trend, with ETH remaining below $4,000 and BTC remaining below the $70,000 price barrier. The cryptocurrency market is currently experiencing bearish momentum, correcting the strength of the past two weeks.
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