Key Points
- Bitcoin (BTC) experienced a price drop below $60,000, influenced by various factors including the upcoming Bitcoin halving 2024.
- Bitcoin options expiry coincides with the fourth BTC halving event, with over 21,845 BTC options set to expire.
Bitcoin (BTC), the world’s leading cryptocurrency, recently saw its price fall below $60,000. However, it managed to bounce back strongly a few hours later. At the time of writing, Bitcoin’s price is trending upwards, trading closer to $65,000. The recent price fluctuations can be attributed to numerous factors, including geopolitical tensions and the upcoming Bitcoin halving in 2024, among others.
Bitcoin Options Expiry and BTC Halving Event
Interestingly, the expiry of Bitcoin options aligns with the fourth BTC halving event. Today, over 21,845 BTC options are expected to expire, carrying a notional value of $1.35 billion and a put-call ratio of $0.63. According to data from the Deribit exchange, the maximum pain point currently sits at $65,000. Despite the belief that Bitcoin’s price is under selling pressure, numerous traders have placed bets at a strike price of $60,000.
The implied volatility across all major terms has seen a decrease, primarily due to the significant drop in the call option price. Furthermore, the halving expectations have not significantly supported the BTC price’s upward movement.
As Bitcoin’s price rebounded before the options expiry, traders capitalized on negative funding rates to initiate long positions, leading to a recovery. On-chain analyst IT Tech pointed out several instances of “short squeezes” as Bitcoin surged over 4% to reach $65,000.
Prominent analyst Skew noticed a trend where shorts were being liquidated and there was increasing interest from long positions. Skew observed that the rebound was largely driven by aggregate CVDs and Delta Spot, with considerable volumes in perpetual contracts resulting from the unwinding of short positions.
Potential Impact of BTC Halving 2024
The Bitcoin halving event will cause a significant supply shock, reducing the daily BTC production by 50% from the current 900 to 450. However, the successful implementation of halving may not immediately lead to a price rally. This is because Bitcoin miners may choose to liquidate their holdings to offset revenue losses, maintaining some selling pressure on Bitcoin after the halving event.
Despite this, the Bitcoin price could see gains in the 12 months following the halving event. Historically, BTC has peaked in its Bull Market 518-546 days after the Halving. Therefore, if the same pattern repeats this time, the next Bitcoin all-time high could occur around September-October 2025.
After achieving its all-time high last month in March, Bitcoin is currently experiencing a pre-halving retrace.
