Bitcoin is facing the possibility of dropping below the $70,000 mark on June 7, as more than $2.2 billion worth of cryptocurrency futures options are set to expire.
Out of the total $2.2 billion, $1.22 billion of Bitcoin futures options are expected to expire on Friday, indicating a potential “max pain point” of $69,500 for Bitcoin’s price.
According to a post by Deribit Exchange on June 6, the BTC futures options are set to expire with a put-to-call ratio of 0.66 on June 7 at 8:00 am UTC. As the expiration date approaches, the crypto markets may experience increased price volatility.
Although the max pain point signifies the price at which most options contracts would become worthless, it does not guarantee that Bitcoin will actually drop to that level.
At 10:50 am UTC, Bitcoin’s price had increased by 0.3% to $70,950. The leading cryptocurrency has seen a 4.6% rise on the weekly chart, as reported by CoinMarketCap.
Analysts from Bitfinex noted a significant decrease in Bitcoin’s open interest from its peak in November 2023, which could lessen the impact of the options expiry on the market.
As the max pain price becomes more widely recognized as an indicator, its influence on Bitcoin’s price may diminish, the Bitfinex analysts added.
Institutional inflows from U.S. spot Bitcoin exchange-traded funds (ETFs) could play a role in keeping Bitcoin above the crucial $70,000 price level. These inflows might help offset the selling pressure from the options expiry on Friday, but traders should still brace for potential volatility.
On June 5, U.S. Bitcoin ETFs saw a combined inflow of $488.1 million, following a strong inflow day of $886.6 million on June 4. By mid-February, Bitcoin ETFs had accounted for approximately 75% of new investments in the cryptocurrency market as it surpassed the $50,000 milestone.