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Can Cryptocurrency Markets Rise Higher When $1.1 Billion Bitcoin Options Expire Today?
Aside from a small midweek decline, cryptocurrency markets have been relatively inactive over the past few days and continue to move sideways.
However, approximately 18,280 Bitcoin options contracts will expire on May 10, which could inject some volatility.
According to Deribit, the notional value of this week’s expiring batch of BTC contracts is approximately $1.15 billion. The batch is slightly smaller than last week’s expiration event.
Bitcoin Options Expiry
The put/call ratio for BTC options this week is 0.64, meaning more calls, or long contracts, expire than puts or shorts.
Longs also dominate in 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 yet to be settled.
OI for put contracts is also starting to rise with around $360 million at the $50,000 strike price, second in 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 by a specific date.
Additionally, trading firms such as QCP Capital and Paradigm have observed a pickup in demand for bull call options, including buyers closing existing positions to move to higher strike calls expiring in July and September.
Expiring Bitcoin options contracts. Source: Deribit
In addition to today’s batch of Bitcoin options, 276,000 Ethereum contracts will also expire.
They have a notional value of approximately $840 million and a put/call ratio of 0.74. There is a lot of OI, around $636 million, at the $3,600 strike price, indicating that Ethereum derivatives traders are also bullish.
Cryptocurrency market outlook
Cryptocurrency 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 absorbed less than $61,000 on May 9, but recovered to reach $63,000 during the Friday morning Asian trading session. The asset has been trending down 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 major gains for Solana (SOL) and Toncoin (TON).