High Bitcoin ($BTC) volatility expected, as more than $10 billion options expiry approaches

With as much as $13 billion in options about to expire on Friday, the market is closely watching the movement of Bitcoin, which is expected to be highly volatile, both before and after the event. Could this options expiry push the price to $100,000, or will $BTC head in the complete opposite direction?

Low max pain price level, but scarcity wins the day

Options are due to expire later on Friday, and many market spectators are keenly awaiting the event. The max pain price for the expiration is currently sitting at around $80,000, which is obviously a very low price given the current $BTC price at just above $96,000. However, even if there was a sudden drop in price, the supply/demand dynamics would likely see the price being bought up again, given Bitcoin’s incredibly scarce supply.

Advantages and disadvantages of options expiry

The monthly options expiry is always eyed with keen interest by the larger market players. There are advantages to the event, which include: 

1. The clearing out of old positions, leading to a more accurate market reset.

2. Possible large market price movements which can be capitalised on by intelligent traders.

3. A boost to liquidity, as traders adjust their positions.

While there are advantages to an options expiry, there is obviously the other side of the coin. The disadvantages are:

1. Huge potential price swings as volatility increases, leading to possible big losses by some traders.

2. Big market players tend to push the price towards the max pain point, which can skew the market.

3. Those holding options have extremely complex decisions to make given the high volatility and unpredictability of the market as expiry approaches.

Can $BTC remain in its ascending channel?

Source: TradingView

Early on Friday, the $BTC price is relatively stable as it moves sideways and slightly downward. As can be seen in the chart above, the main price action is being contained in a possible ascending channel. 

As the price approaches the bottom of the channel, which is also bolstered by the ascending trendline from the 2021 bull market, a decision will be made whether to bounce from this support, or whether to fall through the bottom of the channel and ascending trendline, possibly to much lower levels.

Is the final, and most parabolic stage of the bull market about to begin?

Source: TradingView

In the much higher monthly time frame, the $BTC price is also at an important juncture. The price is holding above the ascending trendline with only one more day to go before the monthly candle closes. That said, the price looks as though it might close below the 1.618 Fibonacci. 

Looking on the bright side, this month’s monster candle is sitting nicely on top of the old $69,000 level, which caused so many problems for the price to battle through, and which has now finally been flipped into support.

This Bitcoin bull market, if it follows the same 4-year cycle as the previous ones, is due to end towards the latter stages of 2025. If the price can take out the $100,000 horizontal level, and hold above, the last, and most parabolic stage of the bull market can begin. Fibonacci target levels are in the chart above.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.