The cryptocurrency market may face a crash this week, as over $11.7 billion in Bitcoin and Ethereum options are set to expire on Deribit. Additionally, market uncertainty is heightened due to the upcoming release of the U.S. PCE inflation data. Currently, Bitcoin prices have dropped over 2%, and Ethereum has also declined by 5%. Bearish sentiment in options is rising, and traders' cautious attitudes have led to increased market volatility. The PCE data is expected to show moderate inflation, which has also raised concerns. Overall, market sentiment is leaning pessimistic, and investors should remain vigilant.
According to recent news, the Crypto Market may face a crash this week due to the monthly options expiration and the upcoming U.S. PCE inflation data release. Over $11.7 billion in cryptocurrency options are set to expire on the largest derivatives exchange, Deribit.
At the time of writing, Bitcoin (BTC) and Ethereum (ETH) prices have begun to decline, indicating heightened volatility and uncertainty in anticipation of significant market events.
$10B Bitcoin (BTC) options expire.
According to Deribit, 92K BTC options with a conceptual value of $7.7 billion will expire on Friday, with an open interest of 0.88. The maximum pain point is $100,000, indicating a high likelihood of further pullbacks.
Moreover, the raw trading volume in the last 24 hours exceeded the call volume. The bid-to-ask ratio is 1.01, indicating that traders are buying more call options than puts. This marks a rise in bearish sentiment.
In the past 24 hours, Bitcoin prices have fallen by over 2%, trading at $106,615 at the time of writing. The 24-hour low and high prices were $106,512 and $108,910, respectively. Additionally, trading volume increased by 7% in the past 24 hours, indicating rising trader interest.
$1.7B Ethereum (ETH) options expire on Friday.
565K ETH options will have a conceptual value of nearly $1.7 billion expiring, with an open interest ratio of 0.83. Additionally, the maximum pain point is $2,300, above the current price of $2,649.
Traders must pay attention to sharp changes in trading volume, as a crash in the cryptocurrency market could lead to further volatility in ETH prices.
ETH price dropped 5% from Thursday's 24-hour high of $2,787, trading at $2,648 at the time of writing. According to Coinglass data, total interest in ETH futures fell by 3.60% to $36.27 billion.
Cryptocurrency News: Liquidation Signals Trade Shift
Data from small shops indicate that cryptocurrency liquidations exceeded $335 million, with 96K traders liquidated in the past 24 hours. The largest single liquidation order of BTCUSDC, valued at $9.83 million, occurred on the cryptocurrency exchange Binary Company.
Nearly $220 million in long positions and $115 million in short positions were liquidated. Most of the sold cryptocurrencies included BTC, ETH, SOL, DOGE, and TRB.
Popular analyst Michael van de Poppe suggested a weekly bearish divergence on Bitcoin dominance, indicating a potential trend shift from bullish to bearish.
The U.S. Bureau of Economic Analysis will release the U.S. Federal Reserve's preferred inflation gauge, the U.S. PCE data, on May 30. The annual PCE is expected to be 2.2%, down from last month's 2.3%. Similarly, after a 0% growth last month, the month-over-month inflation rate is expected to rise by 0.1%.
The annual core U.S. PCE inflation rate, in line with market expectations, is expected to drop to 2.2%, the same as earlier months. Monthly core PCE is expected to increase by 0.1%, up from last month's 0%.
Interestingly, before the PCE inflation data, the U.S. Dollar Index (DXY) fell by 0.54% to 99.33. Additionally, the U.S. 10-year Treasury yield also dropped to 4.424%.
However, according to recent cryptocurrency news updates, Bitcoin and Ethereum prices continue to decline, indicating that traders are becoming cautious before the options expiration.
Furthermore, according to Reuters, U.S. Federal Reserve Chairman Jerome Powell met with President Donald Trump on Thursday. However, Powell clarified that interest rate decisions will depend on data and outlook.