Deribit, the leading exchange in the derivative market, experienced a significant event on May 31. A total open interest of $4.7 billion in Bitcoin and $3.5 billion in ETH expired at 8:00 am UTC. As a result, the price of BTC dropped by 1.8%, while ETH saw a 3% decline within four hours, indicating a bearish pressure.
According to Deribit data, 69,000 Bitcoin (BTC) options expired with a Put Call Ratio of 0.37. This ratio suggests a bullish sentiment as investors favored call options. A low PCR signifies market optimism and significant interest in BTC options.
The put/call ratio (PCR) is a technical indicator that reflects trader market sentiment. A PCR below 0.7 indicates a strong bullish sentiment, while a PCR above 1 signifies a strong bearish sentiment.
For Bitcoin, the maximum pain point, where leverage traders experienced the most losses, is $68,200. As for Ether (ETH), the maximum pain point is $3,300. These levels represent the prices at which asset holders suffer the most loss.
Currently, BTC is trading at $68,210, $2,000 above the pain point, and ETH is trading at $3,738, more than $400 above its pain point.
Although option expiry often triggers sharp price movements, the impact is usually temporary. The market tends to bounce back the following day, offsetting the initial volatility.
The SEC’s approval of the spot ETH ETF in May had a significant and bullish impact on the crypto market. ETH prices surged by 20% in anticipation of the approval. However, the SEC only approved the 19b-4 filing, delaying the actual listing for trading.
Since the ETH ETF approval, the crypto market has been experiencing a bearish sideways movement, with ETH and BTC struggling to break through the $4,000 and $70,000 price barriers, respectively. Currently, the market is undergoing a correction from the previous two weeks’ bullish surge.
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