Nearly 85,000 bitcoin options contracts, worth approximately $2.3 billion, are set to expire this Friday on major cryptocurrency futures and options exchange Deribit.
According to Deribit data, approximately 700,000 Ethereum options, worth more than $1.2 billion, are set to expire on May 26.
“A total of $3.6B in value will be liquidated this Friday, equivalent to approximately 26% of Deribit’s open interest,” the platform said in a recent tweet.
It detailed that the leading cryptocurrency, bitcoin, has a put call ratio of 0.38, indicating a high number of positive bets.
Bitcoin’s maximum pain point, the point or strike price where the greatest number of options open interest will expire worthless, is located at around $27,000.
This level is of vital importance, as it can act as an important support or resistance zone that accelerates price movements.
The current value of bitcoin contracts reaching expiration is an impressive $2.2 billion when converted to dollars. This staggering figure highlights the importance of the upcoming contract expiration and its potential impact on the market.
Ethereum, the second largest cryptocurrency, has a put call ratio of 0.49, indicating a moderately high proportion of bearish sentiment.
Roughly 700,000 Ethereum options contracts have an expiration date of May 26, with an estimated value of over $1.2 billion.
Traders are specifically keeping an eye on the maximum pain price, which is estimated to be $1,800 for Ethereum. This level can act as a focal point for market volatility and potentially affect the short-term volatility of the cryptocurrency.
As Bitcoin and Ethereum near contract expiration, market participants may be anticipating potential volatility in the near-term.
The expiration of these contracts has the potential to create short-term price fluctuations that could ripple across the entire cryptocurrency industry.
“Meanwhile, Implied Volume remains at rock bottom levels for BTC and ETH with DVOL trading at 50 and even lower, but climbing up slightly,” Deribit tweeted.
“BTC and ETH are at similar levels, which is historically rare. We saw a similar rock bottom IV situation in January this year, followed by a huge spike.”
Crypto Assets Struggle Amid US Debt Ceiling Debate Drama
Cryptocurrencies are struggling to gain momentum as investors worry about the debt ceiling and the Federal Reserve’s next move.
According to analysts, even if the US government raises the debt limit before the June 1 deadline, it could still have a negative impact on riskier assets such as stocks and cryptocurrencies as the new US Treasury issuance will reduce liquidity within the market. Might be possible.
Fixed-income assets such as the one-year instruments, which currently offer a 5.15% yield, are generally attractive investment options in times of economic uncertainty.
US money market fund assets, for example, hit a record $5.8 trillion this week as investors focused on short-term debt securities. report by reuters,