As the cryptocurrency market eagerly awaits the expiration of approximately $2.7 billion in Bitcoin and Ether options on May 24, investors and analysts are closely monitoring the potential implications on the prices of these digital assets. This significant event provides valuable insights into the current sentiment and future expectations of the crypto market.

According to a post by Greeks.live on X, a popular platform for tracking cryptocurrency options data, 21,000 Bitcoin options are set to expire, with a put/call ratio of 0.88. This ratio suggests a near-even balance between buyers and sellers, with a slight tilt toward call options, indicating a bullish sentiment among traders. The maximum pain point, which represents the price at which most option buyers would suffer losses, stands at $67,000, representing a nominal value of $1.4 billion.

While the upcoming 21,000 contract expiry is noteworthy, it pales in comparison to the even larger event on May 31, when a staggering $4.3 billion worth of options are set to expire, as reported by Deribit, a leading cryptocurrency derivatives exchange. This massive expiration event is expected to have a significant impact on the crypto market, as traders and investors closely monitor the potential price movements of Bitcoin and Ethereum.

Deribit's data reveals that long positions are predominantly in control when it comes to open interest (OI), with a substantial $830 million tied to the $70,000 strike price for Bitcoin. This suggests that many traders are betting on a substantial price increase for Bitcoin in the near future. Furthermore, higher strike prices also boast significant OI, notably $843 million at the $100,000 mark, further reinforcing the bullish sentiment among traders.

The options expiry event is not limited to Bitcoin, as a significant 350,000 Ether contracts are also expiring, representing a notional value of $1.3 billion. The put/call ratio of 0.58 and a max pain point of $3,200 suggest a slightly bullish tone for Ethereum, with more call options expiring than put options. This aligns with the recent performance of Ethereum, which has taken the lead in the crypto rally, inspired by progress in the approval of Ethereum-based exchange-traded funds (ETFs).

According to Greeks.live's report, Ethereum's short-term options implied volatility (IV) reached 150% at one point, significantly higher than Bitcoin's current IV for the same period. However, the divergence between Bitcoin and Ethereum is now apparent. While Ethereum's bullish sentiment remains strong, maintaining high IV levels for each major term is challenging from the perspective of overall market trading and market structure. This suggests that calendar spreads may be a better choice for traders looking to capitalize on the potential price movements of Ethereum.

In contrast, Bitcoin appears more balanced between long and short positions, with stronger selling call forces. This could indicate that traders are taking a more cautious approach to Bitcoin, potentially expecting a correction or consolidation in the near future.

As the crypto market eagerly awaits the expiration of these options, investors and analysts will be closely monitoring the potential impact on the prices of Bitcoin and Ethereum. The outcome of this event could have far-reaching implications for the overall crypto market sentiment and the future direction of these digital assets.