$2.4B worth of Bitcoin and Ether options expire on May 3, with peak BTC pain at $61K

Bitcoin (BTC) and Ether (ETH) options contracts worth a total of $2.4 billion expire on May 3, which could cause market volatility.

A Bitcoin options contract is a derivative contract that allows investors to speculate on Bitcoin price movements without actually owning the Bitcoin.

There are two types: call and save options. Call options give investors the right to buy a cryptocurrency at a certain price before a certain date. Put options, on the other hand, allow investors to sell cryptocurrency at a certain price before the expiration date.

Investors often use the put/call ratio as a metric to assess the overall condition of the market. If traders buy more than calls, it is considered a bearish signal, and if they buy more calls, the market sentiment is considered bullish.

A call ratio below 0.7 is considered bullish, while a ratio above 1 is considered a bearish indicator.

Related: US lawmakers urge SEC to approve Bitcoin options trading

A total of 23,367 Bitcoin contracts worth $1.39 billion will expire on May 3. Data from the Deribit exchange shows that the call-to-call ratio for Bitcoin options contracts is currently at 0.5, with the highest pain point at $61,000. The maximum pain point refers to the price at which the asset will cause financial loss to the largest number of owners.

Similarly, a total of 334,248 Ether contracts worth $1 billion are expected to expire on Friday as well. These expiring contracts have a call ratio of 0.37 and a maximum pain point of $3,000.

Expiration of options contracts has historically been followed by short-term price volatility in the spot crypto market. Bitcoin and Ether have experienced bearish pressure over the past two weeks.

BTC price has fallen below $60,000, marking a weekly correction of almost 20% by halving. The price of Ether also fell below $2,900. The crypto market often bounces back from option-led volatility within days.

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