Significant Crypto Options Settlement Worth $11.5 Billion Today: Is There Potential for Additional Market Decline?
On Friday, May 30, approximately 92,500 Bitcoin options contracts, valued around $10 billion, are set to expire. This week's event is notable due to the end-of-month period, which could amplify market volatility as it has been in a downward trend for several days.
The put/call ratio for these contracts stands at 0.87, suggesting slightly more long contracts expiring than shorts as sentiment cools. The max pain point is at $100,000, around $6,000 below the current spot price, where the majority of losses will be incurred on contract expiration.
Open interest, the value of yet-to-expire BTC options contracts, is highest at the $120,000 strike price, with a value of $1.7 billion. Additionally, there is an additional $1.6 billion in open interest at the $110,000 strike price, reflecting continued confidence among bullish speculators, according to Deribit.
In a recent update, crypto derivatives provider Greeks Live reported that the market remains optimistic about BTC reaching new highs in the near future. They also noted that the put/call ratio for delivery is declining and that the price of $100,000 has persisted throughout the first half of the year. "Crypto institutions are not showing much reaction to the new highs," Greeks commented, implying low expectations for a near-term surge but more hope for a steady, moderate rise.
Besides the Bitcoin options, around 624,000 Ethereum contracts are also expiring today, with a notional value of $1.62 billion, a max pain point of $2,300, and a put/call ratio of 0.81. This brings the combined crypto options expiry notional value to approximately $11.5 billion.
Greeks Live further commented that the upward momentum of Ether has begun to slow down, and the market has readjusted the price and volatility of ETH slightly.
The crypto market decline has accelerated over the past 24 hours, with total capitalization dropping by 4.4% to $3.46 trillion. Bitcoin is leading losses, with the asset falling below $106,000 during the Asian trading session yesterday, marking a 2% daily dive. Ethereum's momentum is waning as the asset dipped below $2,600 on Friday morning.
Altcoins are predominantly in the red, with larger losses for Solana, Dogecoin, Cardano, Hyperliquid, Chainlink, and Avalanche.
[References][1] Hedging strategies: https://www.investopedia.com/terms/h/hedging.asp[4] Put/Call Ratio: https://www.investopedia.com/terms/p/putcallratio.asp[4] Max Pain Point: https://www.investopedia.com/terms/m/max_pain_price.asp
- High-value Bitcoin options contracts, worth around $10 billion, are due to expire on Friday, May 30, with the max pain point at a price of $100,000.
- open interest for Bitcoin options at the $120,000 strike price is valued at $1.7 billion, demonstrating bullish sentiment among investors.
- Ethereum options with a notional value of $1.62 billion are also set to expire today, with a max pain point of $2,300 and a put/call ratio of 0.81.
- The total crypto market capitalization has dropped by 4.4% to $3.46 trillion, with Bitcoin and Ethereum leading the losses, and altcoins predominantly in the red.
