Bitcoin Faces Potential Dip Below $70k Amid Expiring Futures Options; ETFs Could Cushion Fall
Summary:
Bitcoin's value could potentially dip below the $70,000 mark on June 7 due to the expiration of over $2.2 billion worth of cryptocurrency futures options. Among these, Bitcoin futures options worth $1.22 billion are set to expire, signaling a “max pain point” of $69,500 for the cryptocurrency. Crypto markets often see increased price volatility around options expiration. Despite this, the inflow of U.S. Bitcoin exchange-traded funds (ETFs) could potentially help sustain Bitcoin's value above the key $70,000 threshold.
On June 7th, Bitcoin's value stands at risk of dipping below the crucial $70,000 threshold as cryptocurrency futures options valued at more than $2.2 billion are set to expire. Wherein, Bitcoin futures options worth $1.22 billion are scheduled for expiration on Friday, indicating a potential price dip to the “max pain point” of $69,500 for Bitcoin (BTC). According to a statement posted on Deribit Exchange on June 6, the BTC futures options will expire at a put-to-call ratio of 0.66 on June 7, at 8:00 a.m. UTC. Times approaching options expiration are typically marked by heightened price instability in the cryptocurrency markets. However, the indicated max pain point, where most options contracts become void, doesn’t necessarily mean the asset will definitely hit that price. As of 10:50 a.m. UTC, Bitcoin value experienced a slight rise of 0.3%, trading at $70,950. According to CoinMarketCap, Bitcoin currently trends at an increase of 4.6% on the weekly chart. Bitcoin's Open Interest (OI) has seen a significant reduction since its highest point in November 2023; this reduction would significantly diminish the effects of options expiration, as claimed by a team of analysts at Bitfinex. They stated that currently, the options OI is about 42.5% lesser than in November, hence the impact on the larger market will comparatively be less than before. Institutional inflows from US Bitcoin exchange-traded funds (ETFs) could help sustain BTC above the vital $70,000 mark. ETF inflows might help counterbalance substantial sell-off pressure due to Friday's option expiration. However, Bitfinex has advised traders to be prepared for potential volatility. On June 5, U.S. Bitcoin ETFs received collective inflows of $488.1 million and recorded their second-highest inflow of $886.6 million on June 4. Bitcoin ETFs comprised roughly 75% of new investment in the world's largest cryptocurrency when it exceeded the $50,000 mark on February 15.
Published At
6/6/2024 6:56:53 PM
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