Bitcoin has started to get a more leveled position as time is passing. Thus far, it has managed to keep its head out of the abysmal dip that many market bears were expecting to happen. At the end of the current month, Bitcoin would likely close at around $54K. Another huge concern for the investors is that as the month closes, the massive amount of Bitcoin options also approach their expiration dates.
After, tomorrow the Bitcoin investors would have to make a firm decision about what to do with the $3.6 billion Bitcoin options that would become futile in less than 24 hours. This stage can greatly affect the Bitcoin market and price evaluation. In case a heavy number of investors decide to sell their Bitcoin, the market supply would increase. On the other hand, if the majority of investors chose to show diamond hands, the price may be able to resist further volatility.
Deribit, one of the top crypto exchanges in the world, has drawn out a considerable amount of Bitcoin derivatives options with institutional and retail investors. A dominant majority of these contracts were chartered for a high price of $68500 estimations. It is a sad reality that, thus far, Bitcoin has not been able to hit that mark. However, the max pain value is estimated to be $54,000.
There is increasing unease in the markets since the recent sharp fall of Bitcoin to $48,000. It would be very unusual if the investors chose to refrain from using their contracts and letting them go to waste. The possibility has been reinforced further due to the recent 2% downward correction of the flagship crypto. Nevertheless, in the words of Bitcoin enthusiasts and economist Peter Brandt Bitcoin has the habit of pulling big surprises.
According to Vetle Lunde, the analyst at Arance Research, the recent price history shows that Bitcoin is not going towards a bullish or bearish tendency for the time being. It seems that the flagship cryptocurrency has found a new support position. However, the option sellers who would want to cash in on the opportunity are happy with this “max pain position.” The investors looking to clear out their holdings would like the price to stay on these price ranges until the expiration occurs on Friday.
Even though the options expiration does not oblige the holders to sell out their contracts, the current situation is ideal for the ones who wish to do so. There are many different price levels at which the traders would be able to convert their crypto with other alternatives or fiat. It also depends largely upon the aggregate impact of the individual investors who have different contract quotes based on different buying levels.