The price of Bitcoin (BTC) remained above $69,000 on March 29, 2024, despite the market experiencing the largest quarterly Bitcoin futures options expiry event in history.
According to the global head of derivatives trading at Bybit exchange, Hao Yang, the event was the biggest option expiration in history for Deribit and Bybit. Investors might decide to roll over or unwind their hedging position during the expiration time, and the action of unwinding might have a small impact on the price movement in the near term.
More than $15.1 billion worth of cryptocurrency futures options expired on Deribit on March 29, according to a March 28 X post by Deribit. Of that amount, $9.53 billion represented the notional value of Bitcoin options expiring at a put/call ratio of 0.84, with a ‘maximum pain’ price potential of $51,000.
Despite the expiry, Bitcoin remained above $69,000 and later surged above $70,000, suggesting that the pre-halving retracement might be over.
While options expiry can result in increased volatility, day traders can benefit from such a scenario by using AI trading tools like Finance Phantom, which guarantees increased profits while trading. Nonetheless, the max pain price point in such cases does not offer an accurate reflection of Bitcoin’s long-term price potential, which is linked to its fundamental values, according to Yang.
In the same way that a trendy PC case does not directly affect the performance of the hardware inside, max pain is a notable indicator that offers some insight but eventually has minimal influence on the real price action of Bitcoin.
Despite this colossal expiry, the price impact was minimal, as highlighted by the project manager at Nexo’s prime brokerage division, Andrey Stoychev. He explained that with the current scenario where calls are majorly in the money while puts keep converging to zero, delta hedging has mostly concluded, and he expected minimal interruptions from the expiry.
Nonetheless, the integral question remained: will the call profits get reinvested into new contracts, and if that happens, what strikes and maturities are eventually favored?
The Pre-Halving Bitcoin Correction Might Be Over
Bitcoin’s price lost 0.7% within 24 hours to trade at $69,924, according to CoinMarketCap data. The world’s biggest cryptocurrency is up more than 11.9% on the monthly charts.
Bitcoin’s historic pre-halving retracement happened in line with past historical retraces. The current pre-halving correction might be over in case the price of Bitcoin can flip its old all-time high of $69,000 into support, said Rekt Capital in a March 26 video analysis.
Bitcoin is now peaking and consolidating above its old all-time high, possibly positioning itself for the pre-halving retracement to be over. With more gains expected in the year, investors keep buying every dip that arises resulting in a strong bullish rally currently.
