Around $2.7 billion worth of Bitcoin and Ether options are set to expire on May 24, offering valuable insights into the sentiment of the crypto market.
According to a post on X by Greeks.live, there are 21,000 Bitcoin (BTC) options about to expire, with a put/call ratio of 0.88. This indicates a relatively even balance between buyers and sellers, with a slight inclination towards call options.
The maximum pain point, which is the price at which most option buyers would suffer losses, is $67,000, representing a total value of $1.4 billion.
While the upcoming expiration of 21,000 contracts is noteworthy, it is overshadowed by the much larger event on May 31, when a staggering $4.3 billion worth of options are set to expire, according to Deribit.
Deribit data reveals that long positions have the majority of open interest (OI), with a significant $830 million tied to the $70,000 strike price. Additionally, higher strike prices also have substantial OI, particularly $843 million at the $100,000 mark, indicating a bullish sentiment among traders. The $60,000 strike price stands out as the most notable for put contracts, with $388 million in open interest.
This significant OI suggests that many contracts are still unsettled, indicating that bulls are confident in higher Bitcoin prices, as OI represents the unresolved value of contracts waiting to be settled.
The options expiration event is not limited to Bitcoin, as 350,000 Ether (ETH) contracts are also set to expire, with a notional value of $1.3 billion. The put/call ratio of 0.58 and a max pain point of $3,200 imply a slightly bullish tone, with more call options expiring than put options.
According to the report by Greeks.live, Ethereum recently took the lead in the crypto rally, driven by progress in ETFs, with a one-day increase of 20%. The short-term options implied volatility (IV) reached 150% at one point, significantly higher than Bitcoin’s current IV for the same period.
However, the divergence between Bitcoin and Ethereum is now evident. While Ethereum’s bullish sentiment remains strong, maintaining high IV levels for each major term is challenging in terms of overall market trading and structure.
This suggests that calendar spreads may be a better choice. In contrast, Bitcoin appears to have a more balanced distribution between long and short positions, with stronger forces selling call options.