Millions

Bitcoin

<h2 id="key-points">Key Points</h2>
<ul>
 <li>Bitcoin options worth $4.7 billion and Ether options worth $3.5 billion expired on May 31.</li>
 <li>The expiration of these crypto options contracts often leads to price volatility in the cryptocurrency market.</li>
</ul>
<p>On the last day of May, a substantial number of Bitcoin and Ether options contracts expired. These contracts were valued at $4.7 billion for Bitcoin and $3.5 billion for Ether. The termination of these contracts typically triggers fluctuations in digital currency prices.</p>
<h2 id="understanding-the-put-call-ratio">Understanding the Put/Call Ratio</h2>
<p>The Derbit data revealed that the put/call ratio for the expired <a href="https://crypto.ro/en/cryptocurrencies/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a> (BTC) options stood at 0.61. This indicates that more long contracts expired than shorts. Conversely, the put/call ratio for <a href="https://crypto.ro/en/cryptocurrencies/ethereum/" rel="noopener noreferrer nofollow">Ether</a> (ETH) options was 0.46.</p>
<p>The put/call ratio serves as a technical indicator of market sentiment among traders. A ratio below 0.7 denotes strong bullish sentiment, while a ratio above 1 signifies strong bearish sentiment.</p>
<h2 id="maximum-pain-points">Maximum Pain Points</h2>
<p>For Bitcoin, the maximum pain point, where leverage traders would incur the most losses, was set at $66,000. For Ether, this point was $3,300. At the time, Bitcoin was trading $2,000 above its pain point at $68,210, while Ether was trading over $400 above its pain point at $3,738.</p>
<p>Millions in open interest (OI) were in long positions with strike prices at $70,000, $75,000, $80,000, and even $100,000. Open interest refers to the total number of unsettled outstanding derivative contracts. Some traders had placed long positions on Bitcoin with a target price of $100,000. With $886 million in open interest at this strike price, the number of long positions seemed significant. The total notional value of all outstanding Bitcoin options contracts was $19 billion.</p>
<h2 id="market-reaction-post-spot-eth-approval">Market Reaction Post-Spot ETH Approval</h2>
<p>The spot Ether ETF approval by the Securities and Exchange Commission (SEC) in May was a significant event for the cryptocurrency market. Ether prices increased by 20% in May in anticipation of the approval. However, the SEC only approved the 19b-4 filing, thus postponing the actual listing for trading.</p>
<p>Following the Ether ETF approval, the cryptocurrency market has exhibited a bearish sideways movement, with Ether stuck below $4,000 and Bitcoin below the $70,000 price barrier. Currently, the market is experiencing a bearish momentum, correcting from the bullish surge of the past two weeks.</p>

Implications of $8.2B Bitcoin and Ether Options Expiry on Crypto Markets

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