Bitcoin price is showing signs of recovery again when it jumped to an eight-day high and formed a double bottom pattern around $62,500.
At the time of writing, Bitcoin price is currently at $68,631, up 0.13% since it opened early Thursday in Asian trading.
This technical signal usually gives hope that the downtrend may be nearing its end. Despite the short-term increase, Bitcoin price is still down about 21% compared to a month ago.
Now, the main focus of the market is on a big event, the expiration date of $10.5 billion worth of monthly options that will occur this Friday.
On major derivatives platforms such as Deribit, the majority of trades consist of call options (bets on price increases) and put options (bets on price decreases).
Roughly speaking, the number of call options is larger but there is a big problem for bulls if the Bitcoin price remains below $70,000, around 88% of call options on Deribit are expected to expire worthless.
This means that the real advantage is now tilted towards put holders.
The data shows that about $1.44 billion of put options target prices below $60,000, while another $1.15 billion are at $72,000 and above. In most price scenarios between $65,000 and $74,000, the bearish side still has the potential to make hundreds of millions to over $1 billion in profits.
Interestingly, Bitcoin’s movements are now very closely correlated with the technology stock market, especially the Nasdaq 100 index. Earnings results from the largest AI companies such as Nvidia can be a trigger for global risk sentiment.
With a correlation reaching 90%, any shocks in the technology sector could continue to impact Bitcoin’s direction as these options expire.
To reverse the situation, bulls need a jump of around 9% from current levels to break through the critical zone of $75,000. Without such an aggressive rise, this expiry is likely to continue in favor of the bears.
