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As Bitcoin price rebounded prior to options expiry, traders took advantage of negative funding rates to initiate long positions, leading to a recovery.
Earlier today, the world’s largest cryptocurrency Bitcoin (BTC) took a dive under $60,000 but recovered strongly hours later. As of press time, Bitcoin price is trading 5% up trading closer to $65,000. A lot of factors have been influencing BTC price volatility such as geopolitical tensions, the upcoming Bitcoin halving 2024, and much more.
Interestingly, Bitcoin options expiry coincides with the fourth BTC halving event. Later today, over 21,845 BTC options are set to expire with a notional value of $1.35 billion and a put-call ratio of $0.63. As per data from the Deribit exchange, the max pain point is currently at $65,000. While believing that the Bitcoin price remains under selling pressure, several traders have put bets at a strike price of $60,000.
On the other hand, the implied volatility across all major terms has witnessed a decline, mainly due to the strong drop in the call option price. Moreover, the halving expectations haven’t really supported the BTC price upside.
As Bitcoin’s price rebounded prior to options expiry, traders took advantage of negative funding rates to initiate long positions, leading to a recovery. On-chain analyst IT Tech highlighted several instances of “short squeezes” occurring as Bitcoin surged over 4% to reach $65,000.
Renowned analyst Skew observed a trend where shorts were being liquidated, and there was growing interest from long positions. Skew noted that the rebound was largely driven by aggregate CVDs and Delta Spot, with significant volumes in perpetual contracts resulting from the unwinding of short positions.
Bitcoin New All-Time High after BTC Halving 2024?
The Bitcoin halving event will lead to a major supply shock cutting down the daily BTC production by 50% from the existing 900 to 450. However, the successfully halving implementation may not immediately lead to a price rally. This is because Bitcoin miners might liquidate their holdings in order to compensate for the revenue losses. Thus, it would maintain some selling pressure on Bitcoin after the halving event.
When Could Bitcoin Peak In This Bull Market?
Historically, Bitcoin has peaked in its Bull Market 518-546 days after the Halving (Chart 1)
This is how typical Bitcoin Halving Cycles have progressed
So if history repeats…
Next Bull Market peak may occur 518-546 days… pic.twitter.com/QXZUS7ZyjU
— Rekt Capital (@rektcapital) April 19, 2024
However, Bitcoin price is likely to gain in the 12 months following the halving event. However, as per historical trends, BTC peaked in its Bull Market 518-546 days after the Halving. Thus, if the same pattern were to follow this time as well, the next Bitcoin all-time high could be coming sometime around September-October 2025.
After hitting its all-time high last month in March, Bitcoin is already facing a pre-halving retrace as of now.
