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

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As a seasoned researcher with years of observing Bitcoin’s market dynamics, I find myself both excited and cautious as we approach this major options expiry event.

On Friday, there’s approximately $13 billion worth of Bitcoin options set to expire, causing a close watch on market fluctuations. Given Bitcoin’s reputation for volatility, it’s uncertain whether this event could potentially drive its price up to $100,000 or if it might instead move in the opposite direction altogether.

Low max pain price level, but scarcity wins the day

On Friday, various options will run out, and investors are eagerly anticipating this development. The price level causing the most distress among option holders at expiration is presently around $80,000, which seems low compared to the current Bitcoin price of about $96,000. Nevertheless, if there’s a sudden decrease in price, the balance between supply and demand might cause the price to rebound again, considering Bitcoin’s limited availability.

Advantages and disadvantages of options expiry

Every month, the expiration of options attracts close attention from major market participants. This event offers several benefits, such as:

  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.

On the flip side, while options expirations do have their perks, it’s important to acknowledge their potential downsides as well. Here are some of the drawbacks:

  1. Substantial fluctuations in prices may occur as volatility rises, potentially resulting in significant financial losses for certain investors.

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

  3. Individuals with options face very intricate choices due to the market’s significant fluctuations and uncertainty as the expiration date nears.

Can $BTC remain in its ascending channel?

As an analyst, I’m observing that early on Friday, the Bitcoin price appears to be maintaining a steady, albeit slightly downtrending, course. Referring to the chart provided, it seems that the primary price movement is confined within what could potentially be an ascending channel.

As I observe the price approaching the channel’s base, reinforced by the upward-sloping trendline from the 2021 bull market, I find myself at a crossroads. Will this support hold strong and trigger an uptick, or will the price break through the bottom of the channel and the ascending trendline, potentially leading to significantly lower levels?

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

On a broader, month-to-month scale, Bitcoin’s price stands at a significant crossroads. Currently, it’s hovering above an upward trendline, with only one day left before the monthly chart closes. However, it appears that the price may not manage to stay above the 1.618 Fibonacci level when the month ends.

From a positive perspective, this month’s significant candle is perched comfortably above the previous $69,000 barrier that previously posed numerous challenges for the price to surmount. Remarkably, this level, once a formidable resistance, has now transformed into a potential support.

If Bitcoin’s historical 4-year cycle holds true, we might see the current bull market reaching its conclusion around late 2025. Should the price break and sustain above the $100,000 resistance level, it could signal the start of the most dramatic phase in this bull run. The potential target levels according to Fibonacci are displayed on the chart provided.

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2024-11-29 14:12