The Bitcoin price could experience significant downside volatility unless it manages to recover above $60,000 before the options expire on Aug. 16.
The upcoming crypto options expiry is threatening to add a significant amount of Bitcoin sell pressure that could take the price below another key support level.
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Over $1.4 billion worth of Bitcoin BTC $58,407 options are set to expire on Aug. 16 at 8:00 am UTC, according to Deribit. This sets Bitcoin’s “max pain point” to $60,000, which indicates the price at which most options contracts would expire worthless.
Bitcoin fell over 3.6% during the past 24 hours to trade at $58,101 as of 8:35 am UTC.
This means that the $1.4 billion worth of options will expire and introduce more downside volatility unless Bitcoin can stage a recovery above $60,000. Periods close to options expiry generally bring more price volatility into the crypto market.
Could Bitcoin ETFs help BTC price recover?
Inflows into US spot Bitcoin exchange-traded funds (ETFs) were positive for two consecutive days but turned negative again on Aug. 14, with net outflows exceeding $81 million, according to data from Farside Investors.
However, the favorable Consumer Price Index (CPI) reading could catalyze more inflows into the Bitcoin ETFs, according to Bitfinex analysts
“The favorable CPI data is expected to catalyze further inflows. Investors are likely positioning themselves to benefit from the expected rate cut and the potential for a broader market rally. As a result, we might observe continued and possibly accelerated inflows into these ETFs, reflecting a shift in sentiment towards risk-on assets.”
The US Bureau of Labor Statistics (BLS) reported July Consumer Price Index (CPI) data on Aug. 14, showing annualized price increases for consumers of 2.9%, which marks the slowest rate increase since 2021.
ETF inflows can significantly contribute to a cryptocurrency’s price appreciation. For Bitcoin, ETFs accounted for about 75% of new investment in the cryptocurrency by Feb. 15 as it surpassed the $50,000 mark.
Could Bitcoin price dip below $56,000?
Bitcoin could dip below $56,000 before amassing more upside momentum.
Based on the market sentiment around Bitcoin whales, or large holders, BTC is likely headed to the $56,000 support, according to an Aug. 14 X post by Trade Confident crypto research platform, that wrote:
“Based on current market indicators, we are looking at $56k for $BTC’s next move!”
The $56,000 mark acts as a potential demand zone for Bitcoin, according to pseudonymous trader Crypto Pump Analytics, who wrote in an Aug. 15 X post:
“Now the price of bitcoin is expected to reach the next demand zone of $56k. When bitcoin price comes near the $56k zone we will try long.”
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