Bitcoin and Ethereum Hold Strong Amidst $2.2 Billion Options Expiry

In a major event for the cryptocurrency market, both Bitcoin and Ethereum successfully weathered a massive options expiry on May 26. Deribit, a leading derivatives exchange, reported that over $2.2 billion worth of Bitcoin options and $1.3 billion worth of Ethereum options expired on that day. Despite the significant volume, both cryptocurrencies managed to hold firm, with Bitcoin trading above $26,300 throughout the expiration period.

Bitcoin, the world’s largest cryptocurrency by market capitalization, demonstrated resilience during the options expiry. The $2.2 billion worth of Bitcoin options that expired on May 26 did not exert any notable downward pressure on the price. Throughout the expiration period, Bitcoin remained above the $26,300 mark, showcasing the underlying strength and stability of the cryptocurrency.

June Expiration: (Source: Deribit)

The put-to-call ratio for Bitcoin options was recorded at 0.38, indicating that there were more call options held than put options. This suggests a bullish sentiment among traders and investors leading up to the expiry. Additionally, the “max pain” price, which represents the price at which the greatest number of options holders would experience maximum losses, was identified at $27,000. This further demonstrates the market’s ability to hold above this level, indicating strong support and confidence among market participants.

Ethereum’s put-to-call ratio stood at 0.49, indicating a relatively balanced sentiment between put and call options. While slightly leaning towards puts, this ratio suggests a slightly more cautious approach by traders compared to Bitcoin. The “max pain” price for Ethereum options was identified at $1,800, indicating the price level at which the largest number of options holders would face maximum losses. However, Ethereum managed to hold above this threshold, further reinforcing its resilience in the face of the expiration event.

As we move into June, the cryptocurrency market is gearing up for another significant options expiry. Deribit data suggests a notional value of over $3 billion for the options set to expire next month. This figure slightly surpasses the notional value of the May expiry, indicating sustained interest and engagement in the options market.

The projected “max pain” price for June options stands at $24,000, potentially reflecting a level at which options holders would experience maximum losses. However, it is important to note that the market’s ability to withstand the May expiry with minimal impact indicates that these projections should be approached with caution.

The recent options expiry event for Bitcoin and Ethereum showcased the resilience of these leading cryptocurrencies. Despite a combined notional value of $3.5 billion in options contracts expiring, both currencies held steady without experiencing significant downward pressure on their prices. The put-to-call ratios and “max pain” prices provided insights into market sentiment, but ultimately, the ability to withstand the expiration without significant disruptions highlights the underlying strength and confidence in these digital assets. As the cryptocurrency market prepares for the upcoming June expiry, market participants will closely monitor these developments to gain further insights into the market’s future trajectory.

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