Around 20,500 Bitcoin options contracts are set to expire on Friday, May 22, carrying a notional value of approximately $1.5 billion. This event is on the smaller side, making it improbable that it will influence spot markets. Crypto markets have experienced a downturn throughout the week, with approximately $50 billion exiting the ecosystem as Bitcoin shows signs of continued weakness. Positive news seems to have no effect as investors continue to navigate through macroeconomic challenges. This week’s batch of Bitcoin options contracts shows a put/call ratio of 0.69, indicating a higher number of sellers of longs compared to shorts. Max pain is positioned at approximately $79,000, as reported. This figure is slightly above the current spot prices, indicating that some traders may find themselves out of the money upon expiry.
Open interest, which represents the value or number of Bitcoin options contracts that have yet to expire, is currently highest at the $80,000 strike price on Deribit, totalling $1.65 billion. Meanwhile, short sellers maintain $1.2 billion in OI at the $60,000 level. Total BTC options OI across all exchanges has been steadily climbing this month and is at $37.6 billion, according to reports. Traders have been leveraging the recent rebound to set up defensive positions for the last ten days of the month, according to reports.
It was noted that May and June have historically been seen as unfavourable trading months, with major investors in May “steadily increasing their defensive positions: buying effective protection, selling margin calls at the tail end, and controlling costs.” In addition to today’s batch of Bitcoin options, approximately 123,000 Ethereum contracts are also set to expire, carrying a notional value of $263 million, with max pain positioned at $2,200, and a put/call ratio standing at 1. Total ETH options open interest across all exchanges stands at approximately $6.9 billion.
Crypto markets have experienced another retreat today, with total capitalisation falling to $2.67 trillion. Bitcoin struggled to surpass the $78,000 mark, dipping to an intraday low of $76,750 before experiencing a slight rebound on Friday morning. It seems to have restarted its downward trajectory, pulling the rest of the market down alongside it. Ether and the other altcoins have remained largely stagnant over the past 24 hours, showing minimal movement following a predominantly bearish week.