100k Bitcoin options set to expire: here’s what to expect from the market
Bitcoin’s price is currently $54000 based on data from coinmarketcap.com; as Bitcoin rallies towards its previous ATH of $58330, the price recovered over 8% in less than 24 hours and this is a bullish sign for Bitcoin’s price. This recovery comes at a time when the top 20 altcoins ranked on market capitalization are gaining momentum and offering over 7% gains in 24 hours.
The asset has recovered from the price drop following the Bitcoin options expiry worth $1.2 Billion at the end of February 2021.
Looking at the price chart, it is evident that the recovery from the February price drop is complete and the price has gained over 20 percent since then. The next major event that may negatively impact the price is around the corner, 100k Bitcoin options outstanding for the March expiry.
Despite the fact that Bitcoin inflows to exchanges are up, the price is climbing up since spot exchanges’ NetFlow is being absorbed by the demand – a huge 33500 Bitcoin NetFlow was absorbed. Since the price dropped from the $58400 level, over 63000 Bitcoin flowed into exchanges. Since the ATH, outflows have surpassed inflows, and this may be a reason why the price is on an upward trend. The on-chain analysis suggests that the sentiment is bearish, however, the trade volume suggests otherwise.
Institutional investment inflow is generating new demand and adding to the volatility, supporting the price rally. Though this expiry may have a significant impact on the price, the asset may recover in time to hit the next ATH. Currently, the price is trading closer to the previous ATH; it is more likely that the asset may hit ATH and continue price discovery beyond.
Bitcoin exchange netflow has had an impact on the price of the asset historically. Similarly, at the current price level as well, the netflow is largely positive, and the inflow of Bitcoin is being absorbed by the demand on spot and derivatives exchanges.
Institutional inflow has had a positive impact on the price; however, the inflow has led to corrections in the past. Currently, the recovery from the correction has come from increased correlation with stocks and S&P 500. The impact expected from this options expiry is a negative one, and the maximum pain maybe $49000 for the current price rally.