Bitcoin remains within a bullish formation but is technically under pressure, as shown in the daily chart. At spot rates, there are hints of weakness, especially considering buyers’ failure to breach $72,000.
Over $4.7 Billion Of BTC Options Expiring In 24 Hours
However, one CEO of a crypto firm thinks this is about to change. On May 30, over $4.7 billion of Options contracts will expire at 8:00 AM UTC, possibly sparking a rally to lift prices above $70,000, igniting an uptrend continuation.
In a post on X, the founder points out that most contracts expiring on May 30 are bullish call options, with strike prices exceeding $70,000. Because of this positioning, there appears to be a strong contingent of investors betting on Bitcoin expanding above the psychological $70,000 liquidation line within the next 24 hours.
While this might pan out, lifting sentiment and perhaps sparking more demand to confirm the May 20 gains, only time will tell. Based on the current arrangement, the founder said option traders are closely monitoring the “max pain” price at $65,000. At this level, the largest number of options will expire worthless.
Are Market Makers Pushing Bitcoin Prices Lower: What Happens After Tomorrow?
The odds of BTC drifting lower to this level are also elevated. The analyst said most market makers keep spot prices near the “max pain point” in the lead-up to options expiry dates. Whenever they do this, options dealers, as expected, maximize their profits, rendering most call and put options worthless.
As structured, options give the holder the right, not the obligation, to exercise at a pre-determined price by a given date. Calls allow the trader to buy the underlying asset, in this case, BTC, at a given price. The analyst observes that most calls have a strike price (or exercise price) above $70,000. Only if BTC soars above this level can call options traders buy at the strike price and immediately sell for a profit.
Presently, BTC is trading at around the $67,700 level. Therefore, if prices track lower, falling towards $65,000, a big chunk of call options will expire out of money, becoming worthless. Even so, this won’t necessarily spell doom and gloom for Bitcoin.
Once the expiry period ends, the price impact from market makers will likely subside. Subsequently, BTC prices will likely edge higher in the inevitable repricing, breaking above the $70,000 resistance level.
As prices expand, bulls will be incentivized to re-enter, further driving the coin toward $72,000, confirming the bulls of May 20.
Feature image from Canva, chart from TradingView
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