Bitcoin is facing a potential drop below the $70,000 mark on June 7 as over $2.2 billion worth of cryptocurrency futures options are set to expire.
Out of the total $2.2 billion, $1.22 billion in Bitcoin futures options are set to expire on Friday, indicating a “max pain point” of $69,500 for Bitcoin’s price.
The Bitcoin futures options are set to expire with a put-to-call ratio of 0.66 on June 7 at 8:00 am UTC, as reported by Deribit Exchange on June 6.
Periods leading up to options expiration are often marked by increased volatility in the crypto markets. While the max pain point suggests the price at which most options contracts would expire worthless, it does not guarantee that the actual asset price will drop to that level.
Bitcoin’s price saw a 0.3% increase in the 24 hours leading up to 10:50 am UTC, reaching $70,950. The leading cryptocurrency has seen a 4.6% rise on the weekly chart, according to CoinMarketCap.
Bitfinex analysts noted that Bitcoin’s open interest has significantly decreased from its peak in November 2023, which will reduce the impact of the options expiry.
As the max pain price becomes a more widely known indicator, its effect on Bitcoin’s price diminishes, according to Bitfinex analysts.
Institutional inflows from U.S. spot Bitcoin exchange-traded funds (ETFs) could help Bitcoin stay above the crucial $70,000 price level. These ETF inflows may offset selling pressure from the options expiry on Friday, although traders should still brace themselves for potential volatility.
On June 5, U.S. Bitcoin ETFs saw a total inflow of $488.1 million, with the previous day recording the second-best inflow of $886.6 million. By February 15, Bitcoin ETFs accounted for approximately 75% of new investments in the cryptocurrency as it surpassed the $50,000 mark.