A significant number of Bitcoin and Ether options are set to expire today, adding to the prevailing bearish sentiment in the market. 23,000 Bitcoin options with a value of $1.4 billion and 334,248 Ether contracts with a value of $1 billion are approaching expiration. This comes after the disappointing performance of the Hong Kong ETF, which has contributed to the downward trend in the cryptocurrency market.
The price of Bitcoin experienced a slight increase of 1.8% in the past 24 hours, rebounding from a drop below the $60,000 price level to reach $58,000. Despite this, the monthly and year-to-date performance of Bitcoin remains positive, with returns of 36% and 33% respectively.
The future movement of Bitcoin remains uncertain, with 23,000 BTC options on the brink of expiry. These options have a notional value of $1.4 billion and are accompanied by a Put Call Ratio of 0.49 and a Maxpain point of $61,000. Similarly, 334,248 Ether contracts with a notional value of $1 billion will also expire today. These contracts have a put-to-call ratio of 0.37 and a maximum pain point of $3,000. The Maxpain point refers to the price at which the asset would cause significant financial loss to most of its holders.
The expiration of these options and contracts could further impact the crypto market, which has already seen a decline this week, with Bitcoin reaching its lowest point since March at $60,000. The failure of the Hong Kong ETF to generate significant trading volume has added to the market’s bearish condition. On its first day, the Hong Kong Bitcoin and Ethereum spot ETF only processed $12.7 million in trading volume, attributed to institutional investors focusing on the US market. This has been deemed “very disappointing” by QCP Capital, a Singapore-based crypto trading firm.
In contrast, the US spot Bitcoin ETF has experienced consecutive outflows, with $563.7 million withdrawn on May 1st. This has weakened market confidence and had an impact on the price of Bitcoin. The failure of the Hong Kong ETF to attract substantial volume, combined with the outflows from the US BTC ETF, has contributed to a decline in market confidence and an overall weakening of the market.
In light of these developments, it is recommended to carefully navigate the current market conditions. The current level of implied volatility (IV) is at the average level of the winter bull market, indicating some support. However, the lack of confidence in the market may result in further downward pressure, and it is advised to strengthen block trading.