Highlights
With $249M Gamma for S&P 500 (SPX), it could catalyze massive volatility that could bleed into the stock and crypto market, especially with Bitcoin (BTC). Here’s how BTC price may react to this Friday’s options expiry. Will Bitcoin (BTC) crash to $100,000 or lower or bounce to new ATHs?
According to data from Menthor Q, Friday’s “exipiration is massive.” The S&P 500 (SPX) faces a high-stakes test on May 16, as $249 million in gamma exposure (34.9%) rolls off during monthly options expiry (OPEX). With $223 billion in delta hedging flows in play, dealers’ unwind could flatten volatility and spark a directional move, potentially downward.
This month, the S&P 500 faces higher risk than usual due to the expiry of 249 million in gamma exposure. The risk is mainly in the form of directional moves caused by deal flow stabilization. Hence, a roll off in gamma often causes key price support or resistance levels to vanish, leading to rapid breakouts or reversal scenarios.
With that in mind, here are some key levels to watch for the S&P 500 to understand how it affects Bitcoin (BTC) price and the broader crypto markets.
Due to the correlation between the stock market and cryptos, a risk-off sentiment in the S&P 500 could also influence BTC price moves as well.
As noted above, Bitcoin (BTC) price mirrors the S&P 500’s fragility ahead of Friday’s options expiry. BTC trades today at $102,601 and is leaning bearish. Here are two scenarios that investors can expect for BTC.
With that, the Bitcoin price prediction remains bearish with a short-term bottom formation at $99k to $98k, depending on how BTC reacts to the $100k level.
Over 60% of S&P 500 options volume stems from US institutions, making Friday’s expiry a localized risk event. Hence, it is a key event to watch for US investors. SpotGamma’s tweet outlines,
“Friday’s expiration is setting up to be the most lopsided ever, as call values trounce the value of puts. I mean, 90% of Index options value expiring on 5/16 is calls?!?!”
The massive spot Bitcoin ETF inflows effectively tie the crypto market to equities. Hence, a stock selloff could force liquidations in the crypto market as well..
Friday’s OPEX is a potential catalyst for cross-asset chaos. If the S&P 500 stumbles under gamma pressure, Bitcoin’s correlation could drag it below $100K—or worse. Traders should brace for volatility and watch the US market close for clues.
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