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Bitcoin Faces Potential Price Correction as Options Expire on Deribit

27 Mar 2024
Minute Read: 2
Written by: Denis S.

Sentiment: Neutral

Bitcoin's imminent options expiry on Deribit sparks speculation of a correction towards $50,000 amidst positive ETF inflows and potential pre-halving retracement.

As the crypto world braces for a significant event, over $9.4 billion worth of Bitcoin options on Deribit exchange are set to expire on March 29th, igniting discussions and predictions among analysts and enthusiasts alike.

According to data, a substantial open interest of more than 134,000 BTC is slated to expire on Deribit, hinting at a potential "max pain" scenario pegged around $50,000. This concept revolves around the strike price where the most outstanding Bitcoin options contracts are concentrated, signifying a point where most option holders would face losses at expiry.

Potential Correction to $51,000

Ki Young Ju, the founder and CEO of CryptoQuant, offers insights into a possible price drop to approximately $51,000, contingent on the slowdown of inflows into spot Bitcoin exchange-traded funds (ETFs). With new whales, predominantly ETF buyers, holding a $56K on-chain cost basis, Ju speculates on corrections typically entailing a maximum drawdown of around 30% in bull markets, with a corresponding max pain of $51K.

After a series of negative inflows last week, spot Bitcoin ETFs witnessed a positive influx exceeding $15 million on March 25th, coinciding with Bitcoin's highest daily close in ten days. The collective net inflow of $418 million into ten Bitcoin ETFs on March 26th underscores renewed investor confidence in the market.

Is the Pre-Halving Correction Over?

Analyst Rekt Capital delves into historical pre-halving retracements, asserting that the recent price correction aligns with these patterns. With Bitcoin hovering around $70,000 post-retrace, there's anticipation for a potential breakout to new highs if the previous all-time high of $69,000 functions as a supportive level.

Local Bottom in Sight?

Bitfinex analysts suggest that the recent price correction, amounting to an approximate 17.5% dip from Bitcoin's all-time high, indicates a potential local bottom formation or proximity. The pullback from the peak of $73,666 hints at a stabilizing trend, marking a crucial phase in Bitcoin's price trajectory.

While uncertainties loom regarding Bitcoin's immediate price movements, analysts and market participants maintain a cautiously optimistic outlook, with signs pointing towards potential stabilization and renewed bullish momentum.

articleTags
Crypto Markets
Finance
Industry Leaders
Denis S.CoinScan BD

Denis is an avid Crypto and Blockchain Enthusiast. Having founded a crypto marketing company in 2020, and being full time in the space for over 5 years now, Denis is a big believer in the future of web3 and the potential it has to change the world.

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