Countdown to Impact: Can Expiry of 18K BTC Options Shake Bitcoin
Today marks the expiration of 18,000 Bitcoin options contracts, with the maxpain price set at $62,000.
At the time of writing, the BTC was trading almost flat, exchanging hands at $63,276.
Bitcoin has been taking investors on a roller coaster experience post the halving event, with its price plummeting from a high of 67K to a recent low of 56K, before making a comeback to 65K.
In addition, today is significant as it marks the expiry of roughly 18,000 BTC options contracts, with the max pain price at 62K. Despite this, Bitcoin is currently trading above 63.27K, indicating potential activity in the market prior to the contracts' expiration.
Let's delve into a more detailed analysis of the potential impact this expiration could have on Bitcoin's trajectory.
Can Bitcoin Plummet Towards Maxpain Of $62K mark?
According to the options data from May 10th, there are 18,000 Bitcoin options set to expire. These options have a Put/Call Ratio of 0.64 and a Max Pain point at $62,000, with a total notional value of $1.2 billion.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">May 10 Options Data <br>18,000 BTC options are about to expire with a Put Call Ratio of 0.64, a Maxpain point of $62,000 and a notional value of $1.2 billion. <br>280,000 ETH options are about to expire with a Put Call Ratio of 0.74, Maxpain point of $3,050 and a notional value of…</p>— Wu Blockchain (@WuBlockchain) <a href="https://twitter.com/WuBlockchain/status/1788836933369807274?ref_src=twsrc%5Etfw">May 10, 2024</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
The Max Pain value represents the strike price at which the largest number of options would expire worthlessly, allowing option sellers—who are typically the more dominant market players with greater resources—to maximize profits. As expiration approaches, the market price often gravitates towards the Max Pain value, benefiting these large stakeholders.
Currently, Bitcoin is trading around $63.27K, which is about $1,200 above the Max Pain price. This suggests that Bitcoin's price might decline as it moves towards the Max Pain value of $62K during the expiry period.
Bitcoin Seems Weaker From Technical Point Of View?
The daily charts indicate a descending parallel channel pattern, with the price oscillating within its confines. Presently, the cryptocurrency is attempting to break above the 50-day Exponential Moving Average (EMA), but remains stagnant.
Should the buyers manage to decisively breach and hold above the 50-day EMA, it could pave the way for an ascent to the channel's upper limit at $68K. Conversely, if the momentum wanes and sellers take control, we could witness a retraction to the channel's lower edge.
Conclusion.
Bitcoin has been delivering a roller coaster experience to their investors post the halving event hovering from 56K to 65K. Moreover, Today, 18,000 BTC options were about to expire, with a max pain point at 62K. At press time, Bitcoin traded above 63.27K, hinting at pre-expiry market moves. The market tends to align with the max pain price as expiry nears, suggesting a potential drop for Bitcoin.
Also, The daily chart showcased the formation of a descending channel. Now, on a sustained move above the 50-day EMA, BTC could rise to 68K. Otherwise, it may fall back to the channel's lower boundary.