This activity could potentially exert upward pressure on the price of bitcoin.
Over $9.5 billion worth of bitcoin options open interest is set to expire this week on the Deribit cryptocurrency derivatives exchange. This makes Friday's end-of-month expiry one of the largest the leading crypto derivatives exchange has ever seen.
The max pain level for Friday's end of month expiry on the Deribit derivatives exchange is $50,000. Image: Deribit. The Deribit analysts added that the present situation implies that a large number of options are profitable due to bitcoin's recent price rally, which can lead to derivatives traders seeking to hedge their positions or speculate on further price movements.
"These levels are higher than usual which can also be seen in the low max pain levels. The reason is of course the recent price rally. Higher levels of in-the-money expiries might lead to potential upward pressure or volatility in the underlying and a removal of the lower max pain magnet," Deribit analysts said.According to Deribit Chief Commercial Officer Luuk Strijers, the overall cryptocurrency market is still quite bullish when derivatives data is factored in.
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