A large chunk of Bitcoin options contracts are about to expire, and derivatives traders are eagerly anticipating the prospect.
About 86,000 Bitcoin options contracts will expire on May 26. They have a notional value of $2.26 billion and a maximum pain point of $27,000.
The maximum pain point is the strike price with the most open Bitcoin options contracts. This is the price at which the highest number of contract holders would incur the highest number of losses on expiration.
Bitcoin Bullish Options Ratios
The put/call ratio (PCR) for this batch of Bitcoin options is 0.38. This ratio is calculated by dividing the number of (short) contracts traded by the number of call (long) contracts.
Values below 1 are generally considered bullish, as more speculators are buying more call options than put options. This shows that investors have considered a bullish trend going forward. Expiring call contracts far outnumber expired contracts.
Total open interest, the number of unsettled open contracts is 325,311, according to Deribit. it reported that the put/call ratio is 0.44. This is also indicative of a bullish attitude among derivatives traders.
695,000 Ethereum options contracts are also about to expire. These have a notional value of $1.25 billion and a maximum pain point of $1,800.
Furthermore, the PCR for Ethereum options is 0.49, which strongly favors call (long) contracts. GreeksLive noted:
«Looking at the distribution of expiring options, the percentage of call positions is huge and the prices are close to the maximum pain point right now.»
«This month was a big win for the options sellers,» he noted before adding:
«Especially in the context of the current market downturn and lack of hot spots, sellers of choice are probably the most profitable traders.»
BTC Price Outlook
Bitcoin prices hit a ten-week low just below $26,000 in late Thursday trading. However, they returned to $26,423 during the Asian trading session on Friday morning.
The asset has fallen to a key long-term Fibonacci support level at -61.8%, which is $26,200, according to Glassnode.
A breakdown from this could be ugly, however. Analysts have also predicted that BTC could decline to lower support at $24,400 if the selling pressure continues.
Adhering to Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently verify facts and consult a professional before making any decisions based on this matter.
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