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Bitcoin options contracts worth $2.26B near expiry: Potential upsurge expected

TL;DR

  • Around 86,000 Bitcoin options contracts will expire on May 26. They have a notional value of $2.26 billion and a max pain point of $27,000.
  • According to his research, a swift recapture would be required before Bitcoin can reach $38.8K if it fails to close this week above these levels.
  • The imbalance between the crypto Bull market and the bear market continues.

$2.26 billion worth of contracts for bitcoin options are set to expire. Derivatives traders eagerly await the conclusion of the 86,000 bitcoin options contracts that are set to expire on May 26 as the positive attitude in the market intensifies and the bears retreat. 

Derivatives traders remain bullish as Bitcoin options worth $2.26B approach expiry

According to the reports, several bitcoin option contracts are about to expire. In addition, the prognosis for derivatives traders is becoming more bullish. Some 86,000 bitcoin options contracts will come to an end on May 26. They have a maximum pain point of $27,000 and a hypothetical worth of $2.26 billion.

The strike price represents the maximum point of agony with the most active bitcoin options contracts. At this price, most contract holders would experience losses upon contract expiration.

Bullish Bitcoin Options Ratios

The put/call ratio (PCR) is 0.38 for this group of bitcoin options. The number of traded put (short) contracts divided by the number of traded call (long) contracts yields this ratio.

Values under one are typically considered bullish since more speculators buy call options than put options. This shows that investors have predicted future bullish trends. Far more call contracts are about to expire than put contracts.

image 972

Deribit estimates that there are 325,311 open contracts with total open interest. However, the reports state that the put/call ratio is 0.44. This demonstrates that traders in derivatives are bullish.

Additionally, 695,000 contracts for Ethereum options are scheduled to expire. These have a maximum pain point of $1,800 and a hypothetical value of $1.25 billion. Additionally, Ethereum options have a PCR of 0.49, which strongly favors call (long) contracts.

Bitcoin price outlook

In late trade on May 25, bitcoin prices fell to a ten-week low of less than $26,000. Nevertheless, during the morning Asian trading session on May 26, they returned to $26,423.

image 974

According to Glassnode, the asset has dropped to a crucial long-term Fibonacci level of support at -61.8%, corresponding to $26,200. However, a breakdown from here might be ugly. Analysts have also projected that BTC may decline to lower support at $24,400 if the selling pressure persists.

Trader predicts bitcoin to surpass $38K soon

In a recent market analysis, Michael van de Poppe, a renowned crypto trader, and analyst, examined the potential effects of interest rate pauses and significant resistance levels on the future of Bitcoin (BTC). Van de Poppe stated in his video that BTC’s price might surpass $38K in the upcoming weeks.

The expert claimed that there was a potential for interest rate pauses in the most recent FOMC meeting minutes. He projected that the pauses would happen at the following meeting or one that follows, which might help the cryptocurrency market. A halt in interest rates is typically viewed as favorable for the market mood.

The weekly chart for BTC/USDT

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Source: TradingView

BTC needs help getting over the $30K critical resistance level. Van de Poppe stressed the importance of keeping an eye on the 200-week Moving Average (MA) and 200-week Exponential Moving Average (EMA) levels that are below the price of BTC.

According to his research, a swift recapture would be required before Bitcoin can reach $38.8K if it fails to close this week above these levels. A significant component in influencing the possible price movement would be the speed of reclamation. The price of BTC might fall to $20K if it fails to rise again above the two lines.

The expert also covered how the rise of the dollar affected BTC. From a macroeconomic standpoint, BTC is not favored by a strong dollar. While noting that the Dollar Index is approaching a significant resistance level and is still in a medium-term slump, Van de Poppe suggested it might see a relief rally.

If the US index breaks through this resistance, BTC may trade downward and fall toward the mentioned $20K level. The conclusion would rely on forthcoming fundamental market data over the following several weeks, which the expert anticipated would be negative for the dollar and likely positive for BTC.

At the time of publication, CoinMarketCap showed that BTC had increased by 0.80% over the previous 24 hours to trade at $26,439.31. However, Ethereum (ETH) surpassed the market leader at this time, and the market leader was down 0.66% compared to the top altcoin.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decision.

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Florence Muchai

Florence is a crypto enthusiast and writer who loves to travel. As a digital nomad, she explores the transformative power of blockchain technology. Her writing reflects the limitless possibilities for humanity to connect and grow.

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