Bitcoin Price Stability Amid $85B Options Expiration
Currently trading at approximately $86,300 per coin, the price of bitcoin has been comparatively stable this week. Some $18 billion in bitcoin and ether options will expire on Friday. In the bitcoin options market, the $85,000 support level is currently holding, while ether trades just under $2,750. XRP currently trades at approximately $1.57.
Approximately $18 billion worth of bitcoin and ether options will expire on Friday. This will be the largest such event of the year. Of this amount, approximately $15.9 billion of the options are bitcoin-linked, while the remaining $2.1 billion are ether-linked.
Of the bitcoin options, calls worth $9.4 billion will be expiring, with puts worth $6.5 billion also closing. For ether options, $1.32 billion of calls and $813 million of puts will be closing.
Call options give the holder the right to purchase a given asset at a strike price. For bitcoin, the majority of call options are struck at $90,000 and $100,000. For ether, the calls are struck at $3,000 and $4,000.
If the strike prices of a given option are hit, that option becomes worthless at expiry. It is therefore likely that these strike prices may see elevated activity in the markets, as options traders will look to close out their positions.
Because of the current price of bitcoin, the $75,000 strike price is the expected level of maximum pain. Similarly, $2,250 of expected maximum pain exists for ether. While these may be the expected levels of maximum pain, they are theoretical, and do not necessarily reflect the price at which the options will be exercised on Friday.
Bitcoin is currently trading just above the $85,000 support level.
BTC has pulled back slightly after a weeks worth of strong price action.
Technical analysis shows that the bullish momentum is still present but slowing down. The RSI on the 4hr time frame is at 61 after being in overbought territory. Also the MACD is in a negative zone.
Currently $85,000 is a significant support level.
Looking at the chart, the current targets for BTC are in the $87,000 – $88,000 range. Past those levels, the $90,000 level should provide strong resistance.
BTC does have a large call option order wall at $90,000.
Support should be found at $85,000.
Looking at the charts, Bitcoin’s ETFs continue to see strong inflows. American Spot Bitcoin ETFs saw $715,000,000 worth of inflows yesterday, continuing the 4 day streak for Bitcoin ETFs.
Ethereum Spot ETFs saw inflows for a third straight day, to the tune of $162,000,000.
Yesterday, both Bitcoin and Ethereum ETFs saw inflows totaling $877,000,000.
Between February 7-13, inflows for Bitcoin ETFs were four times higher than inflows for Ethereum ETFs.
Net inflows for ETFs are determined after outflows (withdrawals) have been taken into account.
On-chain data shows that profit taking is happening among Bitcoin short term holders. The realized profit to loss ratio has risen to levels last seen in October 2022.
After an uptrend in the price of Bitcoin, profit taking puts a lid on upward movement and creates selling pressure. A spike in profit realizing among shorter term holders is expected. The focus should be on how quickly profits are realized and the extent of the selling pressure, not if a 50% price drop is imminent.
Short term holders are taking profits and there is call option buying at the $90,000 strike. The price of Bitcoin remains above the $85,000 support. If the price breaks below $85,000, it could test the $82,000 support.
