Would You like a feature Interview?
All Interviews are 100% FREE of Charge
About 85,000 bitcoin options contracts worth about $2.3 billion are set to expire on major crypto futures and options exchange Deribit this Friday.
About 700,000 Ethereum options worth more than $1.2 billion will also expire on May 26, according to Deribit data.
“A total of $3.6 billion will expire this Friday, representing about 26% of Deribit’s open interest,” the platform said in a recent tweet.
It detailed that Bitcoin, the leading cryptocurrency, had a put-call ratio of 0.38, indicating a higher number of positive bets.
Bitcoin’s maximum pain point, the point at which the maximum number of open options expires to nothing or the strike price, is located at around $27,000.
This level is very important as it can act as an important support or resistance area that intensifies the price movement.
The present value of maturing Bitcoin contracts in dollars is a whopping $2.2 billion. This staggering number highlights the importance of upcoming contract expirations and the potential impact they could have on the market.
Ethereum, the second largest cryptocurrency, has a put/call ratio of 0.49, indicating a slightly higher share of bearish sentiment.
About 700,000 Ethereum option contracts expire May 26, with a notional value of just over $1.2 billion.
Traders, in particular, are watching the maximum pain price of Ethereum, which is estimated at $1,800. This level acts as a focal point for market movements and can influence the short-term volatility of cryptocurrencies.
As Bitcoin and Ethereum near the end of their contracts, market participants may expect potential disruption in the short term.
Expiration of these contracts can cause short-term price volatility that can affect the entire cryptocurrency industry.
“In the meantime, implied volumes are still at their lowest levels, with DVOL trading at 50 against BTC and ETH, and even lower in the short term but slightly higher,” Deribit said in a tweet.
“Historically, it is rare for BTC and ETH to have the same level. We saw a similar IV bottom situation in January this year, followed by a significant rally.”
Crypto assets struggle amid US debt ceiling debate
Cryptocurrencies are struggling to pick up pace as investors remain concerned about the debt ceiling and the Federal Reserve’s next move.
Analysts say even if the U.S. government raises the debt ceiling before the June 1 deadline, new U.S. Treasury issuance could reduce liquidity in the market, so stocks and crypto Risk-on assets such as
Fixed income assets, such as 1-year bonds, which currently offer a yield of 5.15%, are usually an attractive investment option in times of economic uncertainty.
U.S. money market fund assets hit a record $5.8 trillion this week, for example, as investors turned to short-term bonds. Reuters report.
