Expiry of over $3.33 Billion worth of Bitcoin and Ethereum Options today, following the release of US Consumer Price Index (CPI) and Producer Price Index (PPI) data.

Get ready to dive into the crypto world as over $3.3 billion worth of Bitcoin (BTC) and Ethereum (ETH) options are set to expire today. This milestone comes on the heels of a slightly lower-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) data. So, how will these expiring options influence the prices of these digital assets and the crypto market volatility?

Billions in Options on the Line - Crypto Market Reaction

According to Deribit, the digital asset world is holding its breath as approximately $2.76 billion in Bitcoin options are up for grabs, with a max pain point of $100,000. This batch of options consists of 26,543 contracts, up from the previous week's 25,925 open interest. The put-to-call ratio for these options is 1.02, meaning traders are betting more on selling BTC than buying it, reflecting a bearish market sentiment.

Moving on to Ethereum, the smart contract giant has $569.42 million in options in the spotlight, involving 219,986 contracts. This is a significant jump from last week's 164,591 contracts. The max pain point for ETH is $2,300, with a put-to-call ratio of 1.36, showcasing a bearish market outlook for Ethereum. It's essential to note that the max pain point in crypto options represents the price level at which option holders experience significant financial discomfort.

As of right now, Bitcoin is trading at $103,912, while Ethereum is exchanging hands for $2,572. Considering both digital assets are above the strike prices with a predominantly bearish market sentiment, markets tend to gravitate toward the strike price or max pain level post-expiry to minimize payouts.

Deribit analysts have shared their thoughts on the situation, stating, "BTC skew is neutral...price action could get interesting." Meanwhile, analysts from Greeks.live have noted that Bitcoin's rejection from the $105,000 threshold occurred during an overextended market. They also mentioned caution in the market, with defensive strategies emerging, and traders preferring to sell rather than chase momentum.

The US CPI and PPI Influence on the Crypto Options Market

These expiring options follow the US CPI data for April, which cooled down to 2.3%, the smallest reading since February 2021. The April PPI inflation also fell to 2.4%, below expectations of 2.5%.

Although the April data has flipped the narrative, markets may be underreacting to this shift. Lower inflation and fading retail could pressurize the Fed to cut rates sooner, despite earlier signals of maintaining steady rates amidst tariff uncertainties and a 2% inflation target[1]. These cuts typically benefit risk assets like Bitcoin and Ethereum, increasing demand for crypto options as investors seek leveraged exposure.

While crypto prices experienced slight short-term volatility post-CPI and PPI, options traders saw heightened activity, increased volumes, and tighter spreads. Traders should carefully analyze technical indicators and market sentiment before investing in this volatile environment.

Although option expirations can cause abrupt price movements, the impact is generally temporary, with the market stabilizing the next day, offsetting initial fluctuations[1][2].

[1] CoinTelegraph[2] The Block

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With $2.76 billion in Bitcoin options and $569.42 million in Ethereum options expiring today, the crypto market is closely monitoring the potential impact on prices and volatility.
The max pain point for Bitcoin options is set at $100,000, with a predominantly bearish market sentiment, as reflected in the put-to-call ratio of 1.02.
For Ethereum, the max pain point is $2,300, and the put-to-call ratio is 1.36, indicating a bearish market outlook for the smart contract giant.
Traders should exercise caution, as the expiring options follow lower-than-expected Consumer Price Index (CPI) and Producer Price Index (PPI) data, which may lead to earlier interest rate cuts by the Fed and increased demand for crypto options.
As the crypto revolution continues, platforms like Uphold offer early access to new tokens, one-step trading, and multi-asset support, allowing investors to trade crypto, stocks, and precious metals in one place.

Expiry of over $3.33 Billion worth of Bitcoin and Ethereum Options today, following the release of US Consumer Price Index (CPI) and Producer Price Index (PPI) data.