Key Points
- Approximately $3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options contracts are set to expire today.
- The expiration of these contracts introduces an element of uncertainty into the cryptocurrency market.
The cryptocurrency market is poised for a significant event as Bitcoin and Ethereum options contracts worth nearly $3 billion are due to expire today.
Despite the recent gains in these digital currencies, the looming expiration of these contracts introduces an element of unpredictability into the market.
Details on the Expiring Contracts
Data from blockchain derivatives market tool, Greeks.Live, reveals that approximately 21,000 BTC and 354,000 ETH contracts are set to expire today. These contracts represent a substantial sum, with $1.4 billion in BTC options and $1.3 billion in ETH options.
While this week’s expiring contracts are significant, even larger options expirations are expected next week. Separate data from Deribit suggests that options contracts worth a staggering $4.3 billion are due to expire on May 31.
For this week’s expiring contract options, the put-call ratios for BTC are at 0.88, while that of ETH is 0.58. These ratios offer insights into market sentiments regarding the contracts. The 0.88 put-call ratio for Bitcoin suggests a relatively balanced distribution between long and short positions.
The “max pain point”, representing the price at which the majority of option contract buyers incur losses, is $67,000 for Bitcoin and $3,200 for Ethereum, with a higher number of call options expiring compared to put options.
Impact on the Crypto Market
The expiration of the 375,000 BTC and ETH options, with a combined valuation of close to $3 million, could influence market dynamics, but the overall impact remains uncertain.
The total market capitalization has seen a decline, falling to $2.5 trillion. This figure represents a decrease of 3.70% at press time. The dip could be associated with the 4.05% decline in BTC prices as the leading crypto asset fell to $66,984 at the time of writing.
As for Ethereum, the digital asset faced significant volatility before the recent approval of Ethereum-based exchange-traded funds (ETFs). Last week, Ether dipped below $2,700. However, the asset rebounded following speculations that it would get an ETF just like BTC.
This speculation resulted in the digital asset reaching a peak of $3,900 just two days ago. Although it has since dropped and is currently trading at around $3,660.
Alternative cryptocurrencies (altcoins) have also experienced mixed movements, with some like Solana (SOL) dropping by 8% in the past 24 hours. SOL is currently valued at around $162.
As for Dogecoin (DOGE), Cardano (ADA), Shiba Inu (SHIB), Toncoin (TON), and Avalanche (AVAX), these altcoins experienced between a 7.3% to 6.0% decline in the last 24 hours.
Others like Chainlink (LINK), Pepe (PEPE), and Ethereum Classic (ETC) show positive momentum.
