Bitcoin Bulls Eye $110,000 Ahead of Major Options Expiry
The crypto market is buzzing as Bitcoin approaches a significant options expiry, potentially setting the stage for a bullish surge. Investors are keenly watching whether Bitcoin can break past the $110,000 mark by May 30. Let’s dive into the factors influencing this potential price movement.
Key Factors Driving the Market
- Bulls are aiming to push Bitcoin above $110,000 to capitalize on $4.8 billion in call options.
- Strong spot Bitcoin ETF inflows and strategic put positioning are giving bulls a considerable advantage.
Understanding the Options Expiry
Bitcoin is gearing up for its largest monthly options expiry of 2025, with a total exposure of $13.8 billion. This presents a golden opportunity for bulls to solidify Bitcoin’s price above the $110,000 threshold. The recent 25% rally has caught many bears off guard, further fueling the bullish momentum. As reported by Cointelegraph, the open interest in Bitcoin put options is substantial at $6.5 billion, but the vast majority (95%) of these positions are set below $109,000. This means that if Bitcoin maintains its current levels, less than $350 million in put options will remain relevant upon expiry.
Conversely, call options up to $109,000 amount to $3.8 billion. However, it’s important to note that not all call option holders are necessarily betting on a price increase. Some traders might be using these options to hedge their exposure above specific price levels.
One popular strategy observed at Deribit is the “short call,” often employed by investors seeking fixed-income returns as long as Bitcoin’s price remains above a certain level. Another strategy, the “bull call spread,” is used to hedge against downside risk by capping potential gains above a predetermined price.
Impact of Bitcoin ETF Inflows
Strong inflows into US spot Bitcoin ETFs are reducing the likelihood of a significant price decline. If Bitcoin can sustain the $109,000 level, most bullish strategies are expected to yield positive results during the May options expiry. However, bears might attempt to influence BTC futures markets to mitigate their losses as the expiry date nears.
The total open interest in Bitcoin futures currently stands at $79 billion, indicating robust demand for short positions. Yet, this strategy could backfire if Bitcoin surpasses $110,000, potentially forcing bears to close their positions. Net inflows of $1.9 billion into US spot Bitcoin ETFs between May 20 and May 22 suggest that demand above $105,000 remains strong. Ultimately, a weaker macroeconomic environment represents the bears’ best hope, as it could increase risk aversion and dampen demand for Bitcoin.
Potential Scenarios and Price Targets
Here are four possible scenarios based on current price trends, estimating theoretical profits based on open interest imbalances:
- Between $102k and $105k: $2.75 billion in calls vs. $900 million in puts, favoring calls by $1.85 billion.
- Between $105k and $107k: $3.3 billion calls vs. $650 million puts, favoring calls by $2.65 billion.
- Between $107k and $110k: $3.7 billion calls vs. $350 million puts, favoring calls by $3.35 billion.
- Between $110k and $114k: $4.8 billion calls vs. $120 million puts, favoring calls by $4.7 billion.
Bulls stand to gain the most by pushing Bitcoin above $110,000, potentially paving the way for a new all-time high. However, the sustainability of this bullish momentum hinges on developments in the ongoing tariff war, which has been a focal point in recent weeks.
Conclusion
The upcoming Bitcoin options expiry is a pivotal event that could significantly influence the cryptocurrency’s price trajectory. Strong ETF inflows and strategic options positioning favor the bulls, who are aiming for a breakthrough above $110,000. However, macroeconomic factors and potential bearish maneuvers in the futures market could introduce volatility. Investors should closely monitor these developments to make informed decisions. This comes just as Ethereum and other altcoins are showing strong market presence, making it an exciting time for crypto enthusiasts.
Disclaimer
The information provided in this article is for informational purposes only and does not constitute financial advice. All news content is sourced from trusted platforms like Cointelegraph, Bitcoinist, and our own writers written with added value, editorial insights and reviews by our team. Always do your own research before making any investment decisions.
