As a researcher with experience in the crypto markets, I find today’s Bitcoin options expiry event to be an intriguing development. With around 23,000 contracts worth $1.4 billion set to expire on May 3, and an additional 330,000 Ethereum options expiring with a notional value of $1 billion, the total value of today’s crypto contract expiry event stands at a significant $2.4 billion.
Approximately 23,000 Bitcoin options with a collective value of approximately $1.4 billion are set to expire on May 3. This value is consistent with what we’ve seen in past expiration periods.
The cryptocurrency market has experienced significant declines throughout the past week. Nevertheless, there has been a slight recovery in late trading on May 2. Despite this, Bitcoin continues to hover below the $60,000 mark, and the overall sentiment among traders has grown increasingly pessimistic in the short term.
Bitcoin Options Expiry
In simple terms, the number of call or buy Bitcoin contracts set to expire in today’s large batch is about two times higher than the number of put or sell contracts scheduled to expire.
As a researcher, I’ve discovered that the maximum potential loss for these options lies at $61,000. This figure is slightly above the present market prices. The term “max pain” signifies the price level where the majority of losses will be incurred upon contract expiration.
Based on Deribit’s data, significant open interest persists for bitcoin options with strikes set above $70,000. A notable amount, specifically $661 million, is attributed to this level at the $100,000 strike price. However, given the current market situation, it’s unlikely that Bitcoin will reach there in the near future.
As a market analyst, I’ve been closely monitoring the recent developments in the crypto derivatives space. This week, we witnessed the launch of spot crypto ETFs in Hong Kong. However, contrary to expectations, these listings didn’t bring significant volume increases. Meanwhile, US spot Bitcoin ETFs have continued to experience outflows this week.
“The market’s vulnerability caused a drop in investor trust,” they stated further, mentioning that the volatility indicators for all significant securities were decreasing.
“The present IV level serves as a benchmark for the winter bull market’s average, offering some backup. Selecting purchases at this time is considered a wise decision.”
The implied volatility represents the estimated market fluctuation for a cryptocurrency, calculated using data from upcoming derivative contracts about to expire.
Approximately 23,000 Bitcoin (BTC) call and put options will soon expire, featuring a put-call ratio of 0.49, implying a greater demand for put options over calls. The max pain point for these contracts is at around $61,000, while their combined notional value amounts to approximately $1.4 billion.
— Greeks.live (@GreeksLive) May 3, 2024
Today, approximately 330,000 Ethereum options with a notional value of around $1 billion will expire alongside Bitcoin options. This adds up to a total value of over $2.4 billion for today’s crypto contracts expiration event.
The put-to-call ratio for Ethereum options is 0.36, with a maximum “pain point” at $3,000 – a price level Ethereum has regained lately.
Crypto Markets Recover
The crypto market experienced a modest rebound on Friday, leading to an increase in total capitalization by 4%, bringing the figure up to approximately $2.35 trillion.
At present, Bitcoin is trading around $59,600, which is close to its previous value, but it hasn’t managed to surpass the psychologically significant $60,000 mark yet.
Earlier today, Ethereum (ETH) surged past the $3,000 mark, registering a 3.7% increase. Simultaneously, various altcoins exhibited notable growth. Notable gainers among them included Solana (SOL), Dogecoin (DOGE), Toncoin (TON), Shiba Inu (SHIB), and Polkadot (DOT).
However, they have all lost heavily since this year’s market high in mid-March.
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2024-05-03 09:25