A total of 53,400 Bitcoin options will expire on Friday, May 28. At first glance, bulls appear to be leading, as the ratio of buy options to sell options of $ 2.1 billion stands at 1.32, which favors neutral or bullish derivatives.
However, after Bitcoin fell 33% in May, the right to acquire BTC at $ 46,000 and above is essentially useless, as there are less than 48 hours left before expiration.
After a brief pullback above $ 42,000 on May 20, Bitcoin entered another correction after a statement from the Chinese government revealed plans to ‘crack down on Bitcoin’s mining and trading behavior, and prevent resolutely the transfer of individual risk ”.
For its part, on May 23, the Huobi exchange reportedly suspended futures trading in mainland China. Wreaking more havoc and pushing Bitcoin below $ 32,000.
As expected, the bears continued to have the advantage of the previous week and have still been able to fix the price of Bitcoin below $ 42,000. For neutral to bullish call options, there is not much profit when you carry over a losing position to the following week. So the bulls will face an uphill battle ahead of the May 28 expiration.
Earnings due to expiration from the previous week created space. For the bears to place more bets on the price of Bitcoin that remains below $ 45,000 or $ 50,000.
May 28 Bitcoin Options Add Open Interest
Now, keep in mind that there are only 2,550 purchase options for BTC at USD 42,000 or less. Which represents only 8% of the slopes.
Meanwhile, the expiration is approaching and the bears hit another home run, as the majority of the bets were placed at $ 36,000 or more. Another curious fact to keep in mind is that the buyers and sellers of futures contracts are paired at all times. So trying to predict which side will put the most pressure is wasted effort.
Deribit, OKEx and Bit.com expire on May 28 at 8:00 am UTC. CME futures and options happen a bit later in the day.
Deribit BTC options open an interest in USD
Although the expiration of $ 3.2 billion on Friday could have a negative impact on the market, these options are divided between call options (neutral to bullish) and more bearish put options.
Remember also that, before jumping to conclusions about whether the result could be bullish or bearish, it is essential to have a more detailed view of the potential buying and selling pressure, which is approaching expiration.