Will Markets Move Higher When $2.6B Bitcoin Options Expire?

Around 26,000 Bitcoin options contracts will expire on Friday, May 9, and they have a notional value of roughly $2.57 billion.

This week’s event is virtually identical to last week’s expiry event, as derivatives crypto trading has remained muted. This may change now, though, as spot markets are ripping higher.

Bitcoin Options Expiry

This week’s tranche of Bitcoin options contracts has a put/call ratio of 0.91, meaning that the short and long contract sellers are pretty closely matched, with slightly more puts. There is also a max pain point of $93,000, $10,000 below current spot prices, which is where most losses will be made on expiry.

Moreover, open interest (OI), or the value or number of BTC options contracts yet to expire, is highest at the $100,000 strike price, with around $1.8 billion, as the bulls bet on higher Bitcoin prices in the future.

However, there is also more than $1 billion in OI at the $80,000 and $85,000 strike prices, but the bears are unlikely to see those for a while yet as markets surge.

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In an update posted earlier this week before the markets went skywards, crypto derivatives provider Greeks Live described the market as “boring chop with traders looking to capitalize on time decay while maintaining downside exposure.”

However, that has all changed now following the 5% gain in total capitalization, breaking Bitcoin out of its rangebound channel.

“While rate cuts now look less likely by June, any dovish surprise or hint at easing could fuel a sharp relief rally across risk assets,” commented Deribit in a market update earlier this week.

In addition to today’s batch of Bitcoin options, there are around 164,000 Ethereum contracts that are also expiring today, with a notional value of $257 million, a max pain point of $1,800, and a put/call ratio of 1.2. This brings Friday’s combined crypto options expiry notional value to around $2.8 billion.

Crypto Market Outlook

Total capitalization has reached a three-month high of $3.33 trillion, primarily driven by Bitcoin and Ethereum.

Bitcoin prices have exploded over the past 24 hours, gaining 4.3% to hit an intraday high of $103,461 during late trading on Thursday. It is the highest BTC has traded since late January when it was cooling down from its all-time high.

The asset is now just 5.4% away from that peak price, having settled at $102,689 during the Friday morning Asian trading session.

However, Ethereum was the star of the show today, surging more than 20% to top $2,200 in early trading on Friday. The move follows the successful deployment of the long-awaited Pectra upgrade this week. The ETH revival has seen the asset gain more than 50% over the past month.

Other altcoins performing well today with double-digit gains include Dogecoin, Cardano, Sui, Chainlink, Avalanche, and Stellar.

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