Bitcoin Options Expiry: $1.5 Billion at $69K Max Pain Price

Approximately $1.5 billion worth of Bitcoin futures options are set to expire on April 12, and this could lead to increased price volatility for Bitcoin, potentially causing it to fall to around $69,000. A post by a trader known as Greeks suggests that the put-to-call ratio of these Bitcoin options is 0.62, indicating a “max pain” point of $69,000. Hao Yang, the global head of derivatives trading at Bybit exchange, explains that the max pain point is simply the price at which most options contracts would expire worthless and does not necessarily dictate where the actual price of Bitcoin will be.

Typically, periods leading up to the expiration of options contracts are characterized by heightened price volatility in the cryptocurrency markets. Yang does not expect this expiration to cause significant volatility due to the relatively small size of these options contracts. He highlights that the options market is still only a fraction of the total crypto derivative market.

At the time of writing, Bitcoin’s price was relatively stable, trading at $70,725. It had experienced a 5.9% increase for the week. While there is potential for increased downside volatility in Bitcoin’s price, it is likely not solely due to the upcoming options expiration. Andrey Stoychev, the head of Prime Brokerage at Nexo, suggests that Bitcoin could approach the $69,000 mark, but whether it falls to that level depends on various factors such as market sentiment and Bitcoin’s relationship with inflation. The recent U.S. Consumer Price Index (CPI) data, which surpassed expectations, has raised concerns about inflationary pressures that could impact Bitcoin’s price dynamics.

In addition to the options expiration, there are other factors contributing to Bitcoin’s volatility. The inflows from spot Bitcoin exchange-traded funds (ETFs) in the U.S. have been slowing down ahead of the Bitcoin halving. Last week, these ETFs generated $220 million in net inflows, a significant decrease compared to their best week on March 11 when they generated $2.58 billion in net inflows. This decline in inflows could be affecting Bitcoin’s price movement.

While the expiration of Bitcoin options contracts could result in increased price volatility, it is not the sole factor influencing Bitcoin’s price. The broader market context, including economic factors and market sentiment, will play a significant role in determining the direction of Bitcoin’s price.