Bitcoin and ether remained stable as quarterly options expired and the dollar index strengthened. On Deribit, the world’s leading crypto options exchange, 150,000 BTC options contracts worth $4.5 billion and 1.2 million ether contracts worth $2.3 billion expired. Market makers in BTC options, who were “long gamma,” could have influenced spot price moves with their hedging activities. However, Bitcoin traded between $30,000 and $31,000 leading up to the settlement and recorded just a 1% gain on the day. This suggests that the magnet effect, where option sellers push prices toward a specific level to cause maximum loss for buyers, may no longer be in play. If other factors remain unchanged, cryptocurrencies could resume their upward trend.
Luuk Strijers, chief commercial officer at Deribit, stated that the reduced level of $26.5K for BTC Max Pain could alleviate downward pressure on prices following the expiration.
For ether, the max pain point for June expiry options was $1,700. At the time of writing, Ethereum was trading at around $1,900, marking a 2% gain and the biggest increase in over a week.
The strengthening of the dollar index, which reached a two-week high of 103.50, has also impacted the crypto market. This uptrend in the dollar index is attributed to upbeat economic data, including a significant decrease in weekly jobless claims, indicating a positive outlook for the US economy.
Attention is now turning to the upcoming release of the core personal consumption expenditures price index (core PCE deflator) by the US Bureau of Economic Analysis. Economists expect the index to show a 0.4% increase month over month in May, with a year-on-year gain of 4.7%, signaling persistent inflationary pressures. This data may further support the case for higher interest rates in the US and contribute to the strength of the dollar.
Traders are also awaiting the release of US personal spending and income figures, which will be released alongside the core PCE reading. These additional data points will offer further insights into the state of the US economy and potentially impact the cryptocurrency market.