On June 5, approximately $1.89 billion in BTC and ETH options expire, coinciding with a weakening crypto market. Bitcoin had previously approached $60,000, while Ethereum neared its recent low, making this expiration particularly noteworthy.
BTC is significantly below key pain levels
Greeks.live data shows that approximately 25,600 Bitcoin options expired that day, with a notional value of about $1.62 billion and a put/call ratio of 0.56, with key strike prices centered around $70,500.
However, before expiration, the price of Bitcoin had already fallen significantly below this level. During the previous decline, BTC approached $60,000, indicating that the settlement levels for many short-term options deviated from the market’s original expectations.
Ethereum is also facing expiration pressure. Approximately 155,000 ETH options are expiring on the same day, with a notional value of around $270 million and a put/call ratio of 0.92, with key strike levels centered near $2,000.
- BTC options expiration volume: $1.62 billion
- ETH options expiration volume: $270 million
- Combined size: approximately $1.89 billion
Demand for downside protection is increasing
Greeks.live noted that as Bitcoin fell below $70,000, short positions became more active in the first half of the week. The market increased bearish positions near $68,000, $65,000, and $60,000 to hedge against further declines.
The institution also noted that the price pullback led to an increase in short-term volatility, with skew turning negative, indicating that market demand for downside protection exceeds interest in upside exposure.
In its June 5 update, Greeks.live noted that the current prices of BTC and ETH are significantly deviating from their respective pain points, with overall market interest weakening and some attention shifting to U.S. equities. It assessed that the market is not heavily betting on a one-sided crash, but active hedging demand is increasing.
Middle East news drives cross-market volatility
This round of cryptocurrency asset pullback also coincided with shifts in global risk appetite driven by changes in the Middle East situation. After Israel and Lebanon agreed to implement a ceasefire on June 4, markets initially anticipated a potential easing of regional tensions.
After the announcement, oil prices initially fell, dropping more than 3% at one point. At the time, the market anticipated that if the situation eased, pressure on transportation through the Strait of Hormuz might lessen. Gold also fluctuated as the dollar and U.S. Treasury yields declined.
However, this easing of expectations did not last. Hezbollah subsequently rejected the proposed agreement, and Israel stated it would not withdraw its forces from Lebanon, reigniting market concerns over U.S.-Iran negotiations and energy transportation.
The market continues to monitor capital inflows.
Currently, the crypto market is focused on whether funds will flow back after options expiration. Bitcoin remains near the lower end of its recent range, while Ethereum continues to face pressure, and overall risk appetite has not yet shown clear signs of recovery.
The market will continue to closely monitor BTC’s performance near $60,000, ETH’s performance near $2,000, and further guidance from oil, gold, and U.S. equities on risk sentiment.