- Bitcoin’s open interest volume by expiration date indicates a majority of bearish sentiment in the market.
- BTC options worth around $2 billion will expire by the end of this week.
- However, options expiration has been correlated with massive sell-offs and price drops in the past.
Following the January 21 options expiration, cryptocurrency market prices fell. The options expiration, involving the open interest of approximately $600 million, appears to have weighed on the market, causing most digital assets to be volatile.
Where is the Bitcoin price going?
Bitcoin price fell below the psychological level of $40,000 as support, sliding to lows near $33,000. Liquidations on trading platforms were significant, with Bitcoin positions accounting for $292 million. BTC fell more than 50% from its all-time high on Nov. 21, marking one of the steepest declines since.
The January 21 options expiry benefited the bears as the price of Bitcoin fell below $40,000, while the peak pain level was $41,000, which is the price at which BTC would lead to financial losses. for the largest number of option holders at expiration.
Since the maximum pain is the strike price of the option for which the greatest number of option contracts will expire worthless, the theory suggests that the price of the asset, Bitcoin, will gravitate towards the pain price. maximum as it heads towards option expiration.
The theory states that market makers will try to stay protected against their open interest, by shorting or sucking the futures market. Market makers have a strong incentive to manipulate spot prices closer to the maximum pain price.
Around $2 billion worth of Bitcoin options are set to expire on January 28, as speculation continues to mount regarding recent market volatility. The open options contracts were worth over 200,000 Bitcoin according to crypto data analytics site Coinglass.
While open interest shows more calls than sells, volume by expiry date indicates a majority of bearish sentiment.
Crypto analysts expect the price of Bitcoin to bottom out after the January 28 options expiration, the last major options expiration date by volume and open interest for the month. Investors should note that this time the maximum pain is $42,000.
The size of Bitcoin options total open interest was nearly $2 billion in December 2018, which was followed by a crypto market crash that saw BTC drop to a low of $3,160. The low was recorded on the first trading day after expiration. Bitcoin price also bottomed on the first trading day after the March 2020 expiry.
Bitcoin price could see a quick rebound towards the resistance zone near the high pain price at $40,000 to $42,000, before plunging again to form a bottom at around $30,000 as previous data suggests that BTC could form a bottom on the first trading day after options expire. .
- Bitcoin’s open interest volume by expiration date indicates a majority of bearish sentiment in the market.
- BTC options worth around $2 billion will expire by the end of this week.
- However, options expiration has been correlated with massive sell-offs and price drops in the past.
Following the January 21 options expiration, cryptocurrency market prices fell. The options expiration, involving the open interest of approximately $600 million, appears to have weighed on the market, causing most digital assets to be volatile.
Where is the Bitcoin price going?
Bitcoin price fell below the psychological level of $40,000 as support, sliding to lows near $33,000. Liquidations on trading platforms were significant, with Bitcoin positions accounting for $292 million. BTC fell more than 50% from its all-time high on Nov. 21, marking one of the steepest declines since.
The January 21 options expiry benefited the bears as the price of Bitcoin fell below $40,000, while the peak pain level was $41,000, which is the price at which BTC would lead to financial losses. for the largest number of option holders at expiration.
Since the maximum pain is the strike price of the option for which the greatest number of option contracts will expire worthless, the theory suggests that the price of the asset, Bitcoin, will gravitate towards the pain price. maximum as it heads towards option expiration.
The theory states that market makers will try to stay protected against their open interest, by shorting or sucking the futures market. Market makers have a strong incentive to manipulate spot prices closer to the maximum pain price.
Around $2 billion worth of Bitcoin options are set to expire on January 28, as speculation continues to mount regarding recent market volatility. The open options contracts were worth over 200,000 Bitcoin according to crypto data analytics site Coinglass.
While open interest shows more calls than sells, volume by expiry date indicates a majority of bearish sentiment.
Crypto analysts expect the price of Bitcoin to bottom out after the January 28 options expiration, the last major options expiration date by volume and open interest for the month. Investors should note that this time the maximum pain is $42,000.
The size of Bitcoin options total open interest was nearly $2 billion in December 2018, which was followed by a crypto market crash that saw BTC drop to a low of $3,160. The low was recorded on the first trading day after expiration. Bitcoin price also bottomed on the first trading day after the March 2020 expiry.
Bitcoin price could see a quick rebound towards the resistance zone near the high pain price at $40,000 to $42,000, before plunging again to form a bottom at around $30,000 as previous data suggests that BTC could form a bottom on the first trading day after options expire. .