On May 15, the crypto market experienced notable turbulence as Deribit settled options contracts worth $2.6 billion across major cryptocurrencies, including Bitcoin, Ethereum, XRP, and Solana. This event led to widespread liquidations and erased most of the gains from the previous day’s Clarity Act announcement.
Specifically, around 25,000 Bitcoin options, valued at over $2 billion, reached expiration with a max pain price of $80,000, which is below the current trading level. Despite a put-call ratio of 0.57 indicating a bullish sentiment overall, the 25 delta skew increased significantly, suggesting that traders are paying a premium for protection against potential downside moves in the near term.
Adding to the pressure, macro factors such as rising US Treasury yields and expectations of prolonged higher interest rates from the Federal Reserve compounded the market’s unease. Economic data released in April showed inflation remaining stubbornly high, leading to a 44% probability of a rate hike by December according to the CME FedWatch tool, up from 22.5% the previous week.
The expiration created a short-term gravitational pull toward the max pain level as market makers adjusted their hedges. XRP dropped from $1.55 to $1.45, while Solana saw a 3% decline relative to its $17 million options expiry. Analysts note that such large expiry events often lead to a period of volatility compression before the next clear directional trend emerges.