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Open Interest In BTC And ETH Signaling An Upcoming Bull Trend?

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The coming monthly expiry on May 31 is experiencing large volumes of trade as the expiry is approaching in comparison to the weekly expiry that was scheduled for Friday, May 24.

BTC Option Trades and the Market

Deribit volume for May 23 reveals that volume on monthly options exceeds daily and weekly option volumes, as shown in the graph below.

Open interest

Source: Deribit.com

On May 23, monthly, weekly and daily options had a volume of 11,980.30, 8754.10 and 2,323.5, respectively.

At the time of writing, the monthly expiry option has a maximum open interest around the call option with a strike price of $100,000. This highlights that most bullish traders are betting on the value rising to $100,000. While the bears are putting their highest bets on the strike price of $51,000,.

The open interest data shows the number of outstanding derivative contracts on the given underlying. In the last 24 hours, the open interest for BTC options has declined 4.11%.

Open interest

Source: Deribit.com

The maximum pain-point is around the strike price of $65,000.

At the same time, the current put call ratio was standing at 0.78, depicting a balance between the put and call buyers and the bullish traders taking a higher charge. A slighter increase in the open interest from bulls can create a clearer bullish view for the market.

A put call ratio measures the number of open put options in relation to the number of open call options in the market. Thus, a ratio of more than 1 indicates that bears are ruling the market, whereas, put-call ratio of less than 0.7 indicates a bullish view of the market.

Does Option Data on ETH Also Suggest a Similar Price Trend?

The call options on Ethereum have a higher open interest on the monthly expiry date of June 28. Whereas the put option has a higher open interest for the May 31 monthly expiry.

For May 31’s monthly expiry, there are 490,127 call options and 400,386 outstanding open interest, whereas the June 28 expiry has 592,301 call options and 326,533 put options outstanding. Ethereum has experienced the highest open interest change in last 24 hours, with a decline of 4.24%.

Open interest

Source: Deribit.com

However, in volume terms, the May 31st expiry exceeds the volume for the next monthly expiry.

Based on the volume data for May 23, the monthly options exceed the volume of weekly and daily options with 301,559 options, 191,046 options and 59,292 options respectively. 

At the time of writing, the monthly expiry option has a maximum open interest around the call option with a strike price of $5000. This highlights that most bullish traders are betting on the value rising to $5000. While the bears are putting their highest bets on the strike price of $3,000.

The maximum pain point for option traders betting on the Ethereum price is $3,400.

Open interest

Source: Deribit.com

The ETH options have a put-call ratio of 0.77, depicting a balanced trade volume on the bull and bear sides. However, a slighter increase in bullish trade volume will suggest an upcoming bullish trend.

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