Will Markets Sink on $2.4B Crypto Options Expiration Event?

As of May 3, there are approximately 23,000 bitcoin options. These are valued at around $1.4 billion, which is similar to previous expiration events.

Crypto markets have been falling sharply all week but recovered slightly in late trading on May 2. However, Bitcoin remains below $60,000 and the sentiment has turned bearish in the short term.

Bitcoin options expire

Today's largest Bitcoin contracts have a call rate of 0.49. This means that twice as many calls or long contracts expire than shorts.

The maximum pain point of these options is $61,000, which is slightly higher than the current spot prices. Maximum pain refers to the price at which the contract expires with the most losses.

According to Deribit, there is still a lot of open interest at the strike price above $70,000. There is even $661 million in OI at a strike price of $100,000, although the chances of BTC getting there in the short term is very slim given the current market conditions.

Crypto derivatives solutions provider Greeks Live commented on the launch of spot crypto ETFs in Hong Kong this week. Listings “failed to generate significant upside,” he said before adding that US spot Bitcoin ETFs had seen flows this week.

“Weakness in the market has weakened market confidence,” he added, before noting that implied volatility of all major contracts fell.

“The current IV level is the mid-water mark of the winter bull market, with some support, and current buying is a good option.”

Implied volatility is a measure of future expected volatility derived from expired crypto derivatives contracts.

May 3 options data 23,000 BTC options with Put Call Ratio of 0.49, Maxpain point of $61,000 and 1.4 billion.330,000 ETH options are about to expire with price of 0.36, Maxpain point. The value of $3,000 and $1… pic.twitter.com/mEA4PV98C3

— Greeks.live (@GreeksLive) May 3, 2024

In addition to today's Bitcoin options, approximately 330,000 Ethereum options will expire. These notional values ​​amount to $1 billion, bringing the total value of today's crypto contract expiration event to $2.4 billion.

ETH options have a call ratio of 0.36 and a maximum pain point of $3,000, a level that was recently recovered.

Crypto markets recovery

A slight recovery was seen in crypto markets this Friday, with total capitalization gaining 4% to reach $2.35 trillion.

BTC has gained the same amount to trade at $59,600 at the time of writing, but has yet to return to the psychological $60,000 level.

ETH jumped above $3,000 following a 3.7% gain on the day. The altcoins were recovering with Solana (SOL), Dogecoin (DOGE), Toncoin (TON), Shiba Inu (SHIB) and Polkadot (DOT) posting strong gains.

However, since mid-March, they have all lost significantly since this year's highs.