Will Bitcoin Fall Below $70K After $2.2B Options Expiration?
Bitcoin could fall below the $70,000 psychological mark on June 7, with more than $2.2 billion worth of cryptocurrency futures options set to expire.
Of the total $2.2 billion, $1.22 billion in Bitcoin futures options will expire on Friday, marking the $69,500 “peak pain point” for the price of Bitcoin (BTC).
BTC futures options are set to expire on June 7, at 8:00 am UTC with a call ratio of 0.66, according to the June 6 X post on Deribit Exchange.
Options expirations often increase price volatility in crypto markets. While the maximum pain point represents the price at which most options contracts expire worthless, it is not a guarantee that the underlying asset will fall to that price.
In the 24 hours up to 10:50 AM, the price of Bitcoin rose by 0.3%. To trade for $70,950. According to CoinMarketCap, the world's first cryptocurrency is up 4.6% on its weekly chart.
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Low Bitcoin Open Interest May Reduce Options Expiration Time: Bitfinex
Bitcoin open interest (OI) has declined from its peak in November 2023, which will significantly reduce the expiration date of options, Bitfinex analysts told Cointelegraph.
“We are currently 42.5% lower in OIA than the November high, and therefore the impact of options expiration on the broader market can be assumed to be less than in the past.”
Bitfinex analysts added that since the peak pain price has become a widely recognized indicator, it has less impact on the price of Bitcoin.
“As the asset class matures, there are many levels of strategies that a trader can use to trade options against their futures or positions, so the maximum pain price reflected from options data alone does not reflect the ‘true' maximum pain price.”
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Bitcoin ETF earnings could help BTC stay above $70k.
Institutional flows from US-based Bitcoin exchange-traded funds (ETFs) could help BTC stay above the key $70,000 price mark.
ETF earnings may take a big selling push from Friday's options expiration, but traders should still expect potential volatility, according to Bitfinex:
“The past two days have seen $1.3 billion in inflows, and the volume of the currency has risen to a monthly high (indicating that there are many active positions entering the market). These are usually signs of a high in markets, which may not be the case now.” , but definitely provides some caution from the slopes.
US Bitcoin ETFs posted $488.1 million in revenue on June 5. ETFs posted their second-highest revenue day on June 4, with $886.6 million.
In the year On February 15, Bitcoin ETFs accounted for 75% of new investment in the world's largest cryptocurrency, rising above $50,000.
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