Bitcoin Options Set to Expire Amidst Market Downturn
Approximately 26,000 Bitcoin options contracts, with a notional value of around $1.6 billion, are scheduled to expire on Friday, June 5. This expiration is smaller than last week’s end-of-month event, suggesting a limited impact on spot markets.
The cryptocurrency market has experienced a significant downturn this week, with over $300 billion erased as Bitcoin weakens and altcoins like Ether face substantial losses. This decline occurs against a backdrop of ongoing military tensions between the U.S. and Iran, persistent global inflationary pressures, and a seemingly elusive diplomatic resolution.
Options Expiry Details and Market Sentiment
The current batch of Bitcoin options contracts exhibits a put/call ratio of 0.56, indicating a greater number of long contract sellers compared to short contract sellers. According to Coinglass, the maximum pain point is situated around $71,000, a level considerably higher than current spot prices, suggesting that a majority of these contracts may expire out-of-the-money.
Open interest (OI) for Bitcoin options, representing the value or number of contracts yet to expire, remains highest at the $80,000 strike price on Deribit, totaling $1.6 billion. However, short sellers maintain a significant presence with $1.1 billion in OI at the $60,000 strike price. Overall BTC options OI across all exchanges has been declining, currently standing at $31.6 billion, as reported by Coinglass.
Bitcoin spot is trading approximately $8,000 below the maximum pain level following a challenging week that saw $1.5 billion in liquidations and a brief dip below $62,000. Deribit noted that the market’s positioning is heavily skewed towards call options.
Crypto derivatives provider Greeks Live observed that “With the price breaking below $70K, bears have become more aggressive, with significant increases in put positions at $68K, $65K, and $60K.”
Ethereum Options Also Expiring
In addition to Bitcoin options, approximately 153,500 Ethereum contracts are also set to expire, carrying a notional value of $266 million. The maximum pain point for Ether options is at $2,000, with a put/call ratio of 0.97. Total ETH options OI across all exchanges is approximately $5.7 billion.
The combined notional value of all crypto options expiring today amounts to roughly $1.85 billion, marking a relatively modest event.
Broader Market Collapse
This week has been the most severe for cryptocurrency markets since early February, with the total market capitalization plummeting to a four-month low of $2.26 trillion.
Bitcoin reached a low of $61,300 on Thursday and has shown little recovery above this level as of Friday morning. The asset remains more than 50% below its all-time high and is currently trading at the lower boundary of its range-bound channel, where significant support is located.
Ether has experienced a sharp decline, hitting a 14-month low of $1,730, its current trading level. Further losses appear probable as the weekend approaches, potentially ushering in another red period for digital assets.
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