Summary:
- 117k Bitcoin Options expire this Friday, March 26th
- The maximum pain point for the expiry is $44k according to the team at Deribit Insights
- Bitcoin has lost the $55k support zone with $53k the level to watch moving forward
- A drop to $49k seems likely
Bitcoin will undergo a big quarterly expiry of options this Friday, March 26th. According to data from the team at Skew, a total of 117,000 BTC in Bitcoin options expire on this date. The team shared their observation through the following Tweet with an accompanying chart demonstrating the magnitude of the event.
Big quarterly expiry this Friday with 117k #bitcoin options dropping off pic.twitter.com/Pxe0tURf1p
— skew (@skewdotcom) March 22, 2021
Bitcoin’s Maximum Pain Price this Friday is $44k
Additionally, the team at Deribit Insights has chimed in on the massive Bitcoin options expiration this Friday by providing a maximum pain price of $44k. The team went on to explain their analysis as follows.
The larger the options OI for an asset, the more likely it has an impact on price of the underlying.
MP for 26th is $44k, which does not mean the market will move to this level, but it does imply that after Friday this potential downward pressure is gone.
Maximum Pain (MP) is defined as the price level at which option holders (buyers) as a whole would suffer the maximum amount of financial pain. It is calculated using the current open interest for the options in consideration.
Bitcoin Could Drop to $49k
At the time of writing, Bitcoin is hovering around the $54,300 price area after bouncing off the $53k support earlier today. The latter level is a result of the $55k support giving in earlier today.
When we factor in the Bitcoin options expiry this Friday, it can be concluded that there will be additional selling pressure within the week that could ultimately lead to lower levels as explained by the team at Crypterium Research below.
The key levels are $57,000 and $58,250. If the price falls below $57,000 and consolidates there on the daily timeframe, we can see a drop of $49,000. If the price consolidates above $58,250 on the daily timeframe, we will see a new chart attempts to set ATH with a high degree of probability.