Bitcoin is facing the possibility of dropping below the $70,000 mark on June 7 as over $2.2 billion in cryptocurrency futures options are set to expire.
Out of the total amount, $1.22 billion worth 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 options expiration date approaches, increased price volatility is often seen in the crypto markets. While the max pain point suggests where most options contracts would become worthless, it does not guarantee that Bitcoin’s price will actually drop to that level.
Bitcoin’s price saw a slight 0.3% increase in the 24 hours leading up to 10:50 am UTC, reaching $70,950. The cryptocurrency has gained 4.6% on the weekly chart, as reported by CoinMarketCap.
Bitfinex analysts noted that Bitcoin’s open interest has decreased significantly from its peak in November 2023, which could lessen the impact of the options expiry.
As the max pain price becomes a more widely recognized indicator, its effect on Bitcoin’s price is diminishing, according to the Bitfinex analysts.
Institutional inflows from US spot Bitcoin exchange-traded funds (ETFs) could help Bitcoin stay above the crucial $70,000 price level. These ETF inflows may help absorb selling pressure from the options expiry on Friday, although traders should still brace for potential volatility.
On June 5, US Bitcoin ETFs saw a combined inflow of $488.1 million, following their second-best inflow day of $886.6 million on June 4.
By February 15, Bitcoin ETFs accounted for approximately 75% of new investments in the cryptocurrency as it surpassed the $50,000 mark.