Over $1.5 Billion Bitcoin Futures Options Set to Expire Amid Market Volatility Predictions
Summary:
Bitcoin (BTC) futures options worth over $1.5 billion are set to expire on April 12, potentially leading to a downward price fluctuation and a "max pain" point around $69,000. Even though options expiry periods usually result in increased price volatility, experts predict it won't significantly affect the trading price of Bitcoin this time. These predictions come amidst increasing concerns over inflationary pressures, heightened by the recent U.S. Consumer Price Index data. Furthermore, net inflows from Bitcoin exchange-traded funds in the U.S. are decelerating ahead of the Bitcoin halving.
As anticipated, Bitcoin (BTC) futures options valued at over $1.5 billion are scheduled for expiration on April 12. This expiration could potentially result in a downward price fluctuation, possibly leading Bitcoin towards the $69,000 mark. The upcoming expiration involves a put-to-call ratio of 0.62, indicating a potential maximum pain point for Bitcoin at $69,000, as per trader Greeks' April 12th X post.
Although the maximum pain point holds relevance, Hao Yang, Bybit exchange's Global Head of Derivatives Trading, expressed that Bitcoin's price will not necessarily sink further. He elaborated that the max pain point denotes the price at which the majority of options contracts could become worthless. However, it doesn't necessarily dictate the trading price of the underlying asset.
Close to options expiration periods, the cryptocurrency market often experiences heightened price volatility. Despite this, Yang believes there's no need for panic due to the relatively small size of the impending option expires.
Up until 10:25 am UTC, Bitcoin's price activity remained static, trading at $70,725. According to CoinMarketCap's data, the pioneer cryptocurrency reflected a 5.9% weekly increase.
Bitcoin might still experience a downward price volatility surge, primarily because of external macroeconomic factors, rather than the approaching options expiry. According to Nexo's Head of Prime Brokerage, Andrey Stoychev, whether Bitcoin falls to the $69,000 mark depends mainly on wider factors including market sentiment and Bitcoin's relationship with inflation.
The recent U.S. CPI data surpassed expectations, raising concerns regarding inflationary pressures. This development might significantly affect Bitcoin's price dynamics. American Consumer Price Index (CPI) print for March was marginally above expectations at 3.5% year-on-year.
Before the Bitcoin halving, the inflows from U.S. spot Bitcoin exchange-traded funds (ETFs) have been decelerating. The past week’s ETFs registered $220 million worth of net inflows. Net inflows from weekly ETFs have been consistently declining since posting $2.58 billion on March 11. The preceding week noted $337 million worth of net inflows, marking a 45% drop from $615 million the previous week. Currently, Bitcoin ETFs hold over 839,000 BTC, approximately $59.4 billion worth, representing 4.26% of the BTC supply.
Published At
4/12/2024 2:49:50 PM
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