$4.2 Billion Bitcoin Options Expires Friday
Bitcoin started the week of expiration of monthly options on a positive note, climbing from $48,000 to $55,000. Options expiring on Friday have a pain threshold level of $54,000 with an amount of $4.2 billion, so many experts expect little to no growth in the main cryptocurrency.
This means that purchasers of put and call options expiring on April 30th may suffer the most losses if Bitcoin settles at $54,000, while sellers make the most profit. Therefore, it is quite possible that there will be an attempt to keep the rate at around $54,000.
Nearly all option contracts expire at 8:00 UTC, which is the set time for monthly contracts traded on Deribit. As you know, this website is the dominant exchange for working with cryptocurrency options.
According to Skew, the total outstanding contract volume for bitcoin options will be around $13 billion, which is 1.3% of the total market capitalization of the first cryptocurrency. However, traders can benefit from observing the “maximum pain” level, especially as the timeline approaches.
Futures and options are now critical new frontiers for traders. It doesn’t matter that in the first quarter bitcoin grew by more than 2 times, nevertheless, at the end of each month, strong pullbacks could be observed.
When the spot price is noticeably higher than the “upper pain threshold” level, then these monthly pullbacks occur in the last week of each month. For example, the price of bitcoin dropped by almost $ 10,000 (from $ 60,000 to $ 50,000) in less than a week before March 26, when the options expired, but at the same time, the price of the coin did not displace far from the $ 44,000 level of maximum pain. A few days later, the cryptocurrency reversed its course and reached highs above $ 60,000 on April 2. This time, Bitcoin bounced back to the “maximum pain” level before options expired.
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