Key Summary:
Bitcoin bulls aim to push the price of Bitcoin above $110,000 by May 30 to fully capitalize on $4.8 billion worth of call options.
The inflow of spot Bitcoin ETF funds and weak short positions give bulls a clear advantage as the monthly options expiration approaches.
Bitcoin is nearing the largest monthly options expiration of 2025, with total open interest reaching $13.8 billion. This event provides bulls with the opportunity to stabilize the Bitcoin price above $110,000, as shorts have been caught off guard by a 25% increase over the past 30 days.
May 30 Bitcoin options open interest (USD). Source: Laevitas.ch
The open interest for Bitcoin put (sell) options is $6.5 billion, but 95% of those positions are set below $109,000. Therefore, if the Bitcoin price remains near current levels, less than $350 million in put options will remain relevant at expiration.
In contrast, the open interest for Bitcoin call (buy) options below $109,000 totals $3.8 billion. However, this imbalance does not mean that every call option holder is betting on a Bitcoin rise. Some traders may sell these options as a hedge against exposure above specific price levels.
The most significant Bitcoin options strategies traded on the Deribit platform over the past two weeks. Source: Laevitas.ch
Among the most important options strategies traded on Deribit in the past two weeks, "selling call options" is a commonly used strategy, where investors typically use it to obtain fixed income returns as long as the Bitcoin price remains above a specific threshold. Similarly, the "call spread" strategy hedges downside risk by sacrificing potential gains above a certain price.
If Bitcoin maintains the $109,000 level, most bullish strategies should yield positive results at the May options expiration. However, shorts may attempt to influence the Bitcoin futures market to limit their losses as the expiration date approaches.
The total open interest in Bitcoin futures currently stands at $79 billion, indicating strong demand for short (sell) positions. However, if Bitcoin rises above $110,000, this strategy could backfire, as shorts may be forced to cover their positions.
The net inflow of $1.9 billion into U.S. spot Bitcoin exchange-traded funds (ETFs) from May 20 to 22 indicates that demand remains strong above $105,000. Ultimately, the main hope for shorts lies in a weakening macroeconomic environment, which could increase risk aversion and reduce demand for Bitcoin.
Here are four possible scenario analyses based on current price trends. These predictions are based on theoretical gains estimated from the imbalance of open contracts but do not consider the complexities of trading strategies.
Between $102,000 and $105,000: $2.75 billion in call options (buy) versus $900 million in put options (sell). The net result shows a bullish advantage with a surplus of $1.85 billion.
Between $105,000 and $107,000: $3.3 billion in call options versus $650 million in put options, with a clear bullish advantage and a surplus of $2.65 billion.
Between $107,000 and $110,000: $3.7 billion in call options versus $350 million in put options, with the bullish advantage expanding to $3.35 billion.
Between $110,000 and $114,000: $4.8 billion in call options versus $120 million in put options, with call options holding an absolute advantage and a surplus of $4.7 billion.
Market bullish investors can maximize their investment returns by pushing the Bitcoin price above the $110,000 mark, which is expected to help Bitcoin create a new all-time high. However, the current upward momentum largely depends on the ongoing developments in the tariff war, which has been a core focus of the market in recent weeks.
Related: DDC Enterprise purchases 21 Bitcoins, initiates a plan to accumulate 5,000 BTC within three years.
This article is for general reference only and should not be considered legal or investment advice. The views, thoughts, and opinions expressed in this article are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Original article: “Can Bitcoin (BTC) Bulls Push Prices Above $110,000 Before $13.8B Options Expiry?”
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