Markets
Could Crypto Markets Rise When $1.1 Billion Bitcoin Options Expire Today?
Aside from a small mid-week dip, crypto markets have been relatively inactive in recent days and continue to trade sideways.
However, around 18,280 Bitcoin options contracts will expire on May 10, which could inject some volatility.
The notional value of this week’s batch of expiring BTC contracts is around $1.15 billion, according to Deribit. The batch is a little smaller than last week expiration event.
Bitcoin Options Expiration
The put/call ratio for this week’s BTC options is 0.64, meaning more calls, or long contracts, are expiring than puts or puts.
Longs are also dominating open interest (OI), with nearly $700 million at strike prices of $70,000 and $100,000. Open interest refers to the number or value of contracts that have not yet been settled.
OI for put contracts is also starting to rise, with around $360 million at the $50,000 strike price, according to for Deribit.
Overall, open interest for Bitcoin call options is more than double the OI for put options, indicating bullish trader sentiment.
Call options give the right to buy the underlying asset at a predetermined price on or before a specific date.
Additionally, trading firms such as QCP Capital and Paradigm have seen renewed demand for upside call options, including buyers closing existing positions to join higher strike calls that expire in July and September.
Bitcoin Options Expiration Contracts. Source: Deribit
In addition to the current batch of Bitcoin options, 276,000 Ethereum contracts are also set to expire.
These have a notional value of around $840 million and a put/call ratio of 0.74. There is a lot of OI, around $636 million, at the strike price of $3,600, indicating that Ethereum derivatives traders are also bullish.
Crypto Market Outlook
Crypto markets gained 2.1% on the day, reaching $2.45 trillion in total capitalization. However, they have consolidated around this level since mid-April, with very little movement in either direction.
Bitcoin dipped under $61,000 on May 9, but recovered to reach $63,000 during Friday morning Asian trading. The asset has been trending downward since its all-time high in mid-March and has lost 15% since then.
Ethereum prices hit an intraday low of $2,953 but have since recovered to reach $3,032 at the time of writing.
Altcoins are mostly in the green at the moment, with bigger gains for Solana (SOL) and Toncoin (TON).