24 May

Around $2.7 billion worth of Bitcoin and Ether options are scheduled to expire on May 24, offering valuable insights into market sentiment within the crypto sphere.

As per a post by Greeks.live on X, there are approximately 21,000 Bitcoin options set to expire, with a put/call ratio of 0.88. This indicates a relatively balanced stance between buyers and sellers, slightly favoring call options. The maximum pain point, where most option buyers would face losses, is $67,000, representing a total value of $1.4 billion.

Although the upcoming expiration of 21,000 contracts is significant, it pales in comparison to the much larger event on May 31, where an enormous $4.3 billion in options are set to expire, according to Deribit.

Deribit data highlights that long positions predominantly control open interest (OI), with a substantial $830 million linked to the $70,000 strike price. Moreover, higher strike prices also exhibit significant OI, notably $843 million at the $100,000 mark, suggesting a bullish sentiment among traders. The $60,000 strike price stands out with $388 million in open interest for put contracts.

This substantial OI indicates that many contracts are still unresolved, indicating bullish confidence in significantly higher Bitcoin prices, as OI represents the value of contracts awaiting settlement.

The options expiry event extends beyond Bitcoin, with a notable 350,000 Ether contracts also expiring, amounting to a notional value of $1.3 billion. A put/call ratio of 0.58 and a max pain point of $3,200 imply a slightly bullish tone, with more call options expiring than put options.

Greeks.live's report highlights Ethereum's recent leadership in the crypto rally, driven by ETF progress, with a one-day surge of 20%. Short-term options implied volatility (IV) reached 150% at one point, significantly surpassing Bitcoin's current IV for the same period.

However, there's now a clear divergence between Bitcoin and Ethereum. While Ethereum's bullish sentiment remains strong, maintaining high IV levels for each major term poses challenges from a market trading and structure perspective.

This suggests that calendar spreads might be a preferable choice, whereas Bitcoin appears more balanced between long and short positions, with stronger selling call forces.

May 2024, Cryptoniteuae

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