On May 31, Deribit, the leading exchange in the derivative market, witnessed a total open interest of $4.7 billion in Bitcoin and $3.5 billion in ETH expire. This event took place at 8:00 am UTC and had a noticeable impact on the prices of both cryptocurrencies. Within four hours, BTC experienced a 1.8% decline, while ETH recorded a 3% drop, indicating a bearish sentiment in the market.
According to data from Deribit, a total of 69,000 Bitcoin (BTC) options expired with a Put Call Ratio (PCR) of 0.37. This suggests a bullish sentiment among investors as they favored call options. A low PCR is a positive sign, indicating optimism and significant market activity in BTC options.
The PCR is a technical indicator that reflects trader sentiment. A PCR below 0.7 is considered strongly bullish, while a PCR above 1 is considered strongly bearish.
The maximum pain point for Bitcoin, where leverage traders suffered the most losses, was at $68,200. For Ether (ETH), the maximum pain point was at $3,300. This pain point represents the price at which asset holders experience the most significant loss. Currently, BTC is trading at $68,210, $2,000 above its pain point, and ETH is trading at $3,738, more than $400 above its pain point.
Although the expiration of options often leads to sharp price movements, the impact is usually temporary. The market tends to bounce back the next day, offsetting the initial volatility.
In related news, the recent approval of the spot ETH ETF by the Securities and Exchange Commission (SEC) in May was a significant event for the crypto market. However, the SEC only approved the 19b-4 filing, delaying the actual listing for trading. Since this approval, the crypto market has been experiencing a bearish sideways movement, with ETH and BTC struggling to break through key price barriers of $4,000 and $70,000, respectively. Currently, the market is undergoing a correction from the bullish surge of the past two weeks.
Overall, the crypto market is facing a challenging battle against regulatory forces, as the SEC and other regulatory bodies grapple with the legal implications of cryptocurrencies.