Tech
Could this lead to an increase in cryptocurrency prices?
Since this week, the cryptocurrency market has maintained steady upward momentum, fueled by Ethereum’s solid performance and SEC ETF approval. However, one upcoming event has caught everyone’s attention: the expiration of Bitcoin options contracts with a notional value of $1.4 billion on May 24.
By Derbit’s metrics, the expiration of 21,000 Bitcoin options contracts on May 24 is seen as a small event. This then leads to a much bigger event on May 31, when $4.3 billion worth of Bitcoin options contracts will expire.
Bitcoin and Ethereum Options Expiration: Insights into Market Sentiment
For Bitcoin options contracts expiring this week, the put/call ratio is 0.88.
For context, this put/call indicator provides information on current market sentiment. Therefore, this current ratio suggests a relatively balanced distribution between bullish and bearish sentiment.
According to Deribit, open interest data shows that many investors are opening long positions on Bitcoin prices. Many contracts will also benefit from increased prices.
At the strike price of $70,000, Open Interest stands at approximately $830 million, while at the $100,000 level it reaches a substantial $843 million. Interestingly, the $60,000 strike price has the highest OI for put contracts, at $388 million.
Ethereum Options: Bullish Momentum Ahead of SEC Deadline
In the Ethereum options market, approximately 354,000 contracts with a notional value of $1.5 billion expire today. Ethereum’s put/call ratio stands at 0.59, signaling a higher concentration of call options, reflecting bullish sentiment among traders.
Notably, derivatives traders have predicted a bullish price surge for Ethereum in anticipation of the SEC deadline. Investors have bet around $515 million that Ethereum will reach $4,000.
Massive Options Expiration, Crypto Markets Brace for Impact
Approximately $3 billion worth of Bitcoin and Ethereum options contracts will expire today. However, this is not expected to cause significant price movement. In the past, similar events have not had a major impact on the overall cryptocurrency market.
Currently, the total cryptocurrency market capitalization recorded a decline of 3.6% to $2.52 trillion. This decline can be mainly attributed to Decrease of 3.55%. in Bitcoin prices.
On the other hand, Ethereum, the second largest cryptocurrency by market capitalization, is battling volatility following yesterday’s highly anticipated SEC decision.
However, the market has stabilized, with Ethereum trading at around $3,700. According to CoinMarketCap, some cryptocurrencies such as Chainlink (LINK), Lido DAO (LDO) and Ondo (ONDO) have risen.
Unfortunately, others, such as Solana (SOL), Dogecoin (DOGE), and Tron (TRX), have suffered losses. Despite the impending options expiration and its potential impact, market participants remain cautiously optimistic.
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