Bitcoin options expiration may signal recent US inflation data volatility
Today, over $2.76 billion in Bitcoin options are set to expire, with the highest pain point lingering around $100,000, indicating that option holders may face maximum losses. Currently, the put/call ratio for Bitcoin is 1.02, suggesting that traders are more inclined to hold protective puts rather than speculative calls, highlighting bearish sentiment in the market.
Ethereum options are similarly active, with today's expiring options valued at $569.42 million and a put/call ratio of 1.36. This situation indicates a heightened bearish expectation for Ethereum, with its highest pain point at $2,300. Notably, the number of Ethereum contracts surged from 164,591 in the previous week to 219,986, indicating an increase in trading activity as traders adjust their positions in anticipation of market trends.
The concept of “maximum pain” plays a crucial role in this context, as the market tends to fluctuate towards this level as the expiration date approaches. Currently, Bitcoin is trading at $103,912, and Ethereum at $2,572—both above their respective strike prices.
These options are expiring just as the highly anticipated US CPI and PPI data are released. The CPI for April fell to 2.3% year-on-year, the lowest since February 2021, while the PPI inflation rate also dropped to 2.4%, below the expected 2.5%, reshaping investor sentiment.
Conclusion
$3.3 billion in Bitcoin and Ethereum options expiration comes at a critical moment, with US inflation data surprisingly low. While this may indicate long-term price increases, the short-term outlook remains unclear, with bearish sentiment prevalent and market volatility likely to dominate market trends in the coming days.
