TL;DR

Over $3.33 billion in Bitcoin and Ethereum options expire today, with key price levels at $100,000 and $2,300 respectively.
April inflation in the US came in lower than expected, reigniting bets on earlier-than-expected rate cuts.
Despite a favorable environment for the crypto market, investors are adjusting their hedges and taking profits after the recent rally.

More than $3.33 billion in Bitcoin and Ethereum options expire today, in a session marked by the impact of the latest US inflation data.

The release of April’s CPI and PPI, both below market expectations, shifted forecasts for the Federal Reserve’s monetary policy and reignited bets on rate cuts happening sooner than anticipated.

Uncertainty Among Bitcoin Investors

According to Deribit data, the bulk of these positions are concentrated in Bitcoin, with $2.76 billion in options reaching expiration. The price level that concentrates the highest potential losses for traders, known as the “maximum pain point,” stands at $100,000. Despite this, Bitcoin is trading above $104,000 according to CoinMarketCap, with a slightly bearish put-to-call ratio of 1.02. This suggests a mild investor preference for defensive positions, though without a clearly defined trend.

Greater Caution Around Ethereum

Ethereum, meanwhile, faces the expiration of $569 million in contracts. Its maximum pain point sits at $2,300, while the token holds above $2,570. Unlike Bitcoin, its put-to-call ratio climbs to 1.36, reflecting a more cautious sentiment among traders.

The importance of these expirations lies in the fact that, on days like this, prices often gravitate toward the levels where traders would suffer the most losses. While this isn’t a fixed rule, it’s a pattern that tends to repeat itself to minimize premium payouts on both sides of the market.

A Sharp Shift in Expectations?

The latest inflation report immediately altered expectations around interest rates in the US. April’s CPI landed at 2.3%, its lowest level since February 2021, while the PPI fell to 2.4%. This eased pressure on the Fed to maintain its restrictive policy and opened the door to a possible rate cut before the end of the year.

This type of scenario typically benefits higher-risk assets like Bitcoin and Ethereum, as it supports market liquidity and lowers the opportunity cost of holding positions in cryptocurrencies. Still, the market continues to show signs of caution.

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Filed under: News - @ May 16, 2025 5:29 pm