$51K is the maximum pain? Friday is the expiration day for Bitcoin options worth approximately $9.4 billion

Written by Rock Buivy

Post Date: 28 Mar, 24

Max suffering Due to the Friday expiration of approximately 134,000 BTC on Deribit, the price of bitcoin is currently at around $50,000.

On March 29, around $9.4 billion worth of Bitcoin options are scheduled to expire on the Deribit cryptocurrency platform. Some analysts believe that the $50,000 area could be the price of Bitcoin at which it will reach its “max pain.”

Maximum suffering Bitcoin value nearer $50,000

According to data released by Unfolded in a March 27 X (previously Twitter) post, over 134,000 BTC worth of open interest is scheduled to expire on the Deribit exchange at 8 am UTC on Friday, indicating a maximum pain price of $50,000.

The striking price at which the majority of open Bitcoin options contracts (calls and puts) would result in financial losses for most option holders at expiration is known as the maximum pain price.

The founder and CEO of CryptoQuant, Ki Young Ju, stated in an X post on March 22 that if inflows into spot Bitcoin exchange-traded funds (ETFs) were to slow down, Bitcoin may potentially experience a fall to the $51,000 mark.

The on-chain cost basis for new whales, who are primarily ETF buyers, is $56K. In bull markets, corrections usually involve a maximum loss of approximately 30% and a maximum suffering of $51,000.

The spot Bitcoin ETFs experienced net inflows of nearly $15 million on March 25, the day the price of Bitcoin reached its highest daily close of over $69,000 in the previous 10 days, following five days of negative outflows the previous week.

On March 26, there was a $418 million net inflow for the ten Bitcoin ETFs combined.

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Is the Bitcoin correction prior to the halving over?

Analyst Rekt Capital stated in a March 25 X post that the price correction of Bitcoin prior to the halving was consistent with prior historical retracements.

The Pre-Halving Retrace happened just as planned. Bitcoin is currently back at $70,000.

In a video analysis released on March 26, Rekt Capital stated that if the previous all-time high of $69,000 is turned into support, the price of bitcoin might surge towards new all-time highs:

Bitcoin is potentially positioning itself for this pre-halving retracement to be over as it is currently peaking beyond this previous all-time high.

Bitfinex researchers indicates that the price of Bitcoin may have already formed a local bottom or is nearing one, based on the price correction that occurred last week:

We think the recent decline in Bitcoin from its all-time high of $73,666, which equates to a roughly 17.5% correction, indicates we may be approaching the establishment of a local bottom, if not already there.

Determining whether the Bitcoin correction prior to the halving is conclusively over is a complex task in the volatile world of cryptocurrency.

The halving event, which occurs roughly every four years and reduces the rate at which new Bitcoins are created, often triggers significant market movements.

Following the 2020 halving, Bitcoin experienced a remarkable surge, reaching all-time highs, but it also encountered substantial corrections along the way.

As of now, Bitcoin appears to have stabilized after a period of intense volatility, but whether this signifies the end of the correction remains uncertain.

Market sentiment, institutional interest, regulatory developments, and macroeconomic factors all play pivotal roles in Bitcoin’s price trajectory, making it challenging to predict with absolute certainty whether the correction has concluded.

Analysts and investors continue to closely monitor Bitcoin’s price movements and fundamental indicators to gauge its future direction.

Technical analysis, which examines historical price data and trading volumes, can offer insights into potential support and resistance levels.

Additionally, macroeconomic factors such as inflation, interest rates, and geopolitical tensions can influence Bitcoin’s appeal as a store of value and hedge against traditional financial assets.

While some believe that Bitcoin has already bottomed out and is poised for a resurgence, others remain cautious, anticipating further price fluctuations before a definitive trend emerges.

Ultimately, only time will tell whether the correction preceding the halving has truly come to an end or if further turbulence lies ahead in the dynamic landscape of cryptocurrency markets.

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