Bitcoin and Ether options worth $2.7B set to expire

The upcoming 21,000 contract expiry is dwarfed by the significantly larger $4.3 billion options expiry on May 31, according to Deribit.

Approximately $2.7 billion in Bitcoin and Ether options are set to expire on May 24, providing valuable insights into the crypto market sentiment. 

According to a post by Greeks.live on X, 21,000 Bitcoin (BTC) options are about to expire with a put/call ratio of 0.88. This indicates a near-even balance between buyers and sellers, with a slight tilt toward call options.

Meanwhile, the maximum pain point, which is the price at which most option buyers would suffer losses, is $67,000, representing a nominal value of $1.4 billion.

While the upcoming 21,000 contract expiry is notable, it pales in comparison to the significantly 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 are predominantly in control when it comes to open interest (OI), with a substantial $830 million tied to the $70,000 strike price.

Moreover, higher strike prices also boast significant OI, notably $843 million at the $100,000 mark, indicating a bullish inclination among traders. With $388 million in open interest, the $60,000 strike price stands out as the most notable for put contracts.

Related: SEC’s ETF nod could bring ‘ETH season’ if 3 key indicators hold

This substantial OI indicates that many contracts remain unsettled, revealing that bulls are confident of much higher Bitcoin prices, as OI represents the unresolved value of contracts waiting to be settled.

The options expiry event is not limited to Bitcoin, with a significant 350,000 Ether (ETH) contracts also expiring, representing a notional value of $1.3 billion. The put/call ratio of 0.58 and a max pain point of $3,200 suggest a slightly bullish tone, with more call options expiring than put options.

According to the Greeks.live’s report, Ethereum recently took the lead in the crypto rally, inspired by ETF progress, with a one-day 20% rise. 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 from the perspective of overall market trading and market structure.

This suggests that calendar spreads may be a better choice. In contrast, Bitcoin appears more balanced between long and short positions, with stronger selling call forces.