Bitcoin Faces $3 Billion Options Expiry at $106,000 Max Pain Price

On July 4, nearly $3 billion worth of Bitcoin options contracts are set to expire, a significant event that could potentially influence the cryptocurrency's short-term price movements. These contracts are scheduled to expire at 08:00 UTC, with the "max pain" price currently set at $106,000. This price level is where most options, both calls and puts, expire with minimal value, often resulting in the least payout to traders and the highest benefit to sellers. As the expiration date approaches, price action may move towards this level, especially if it is within reach. As of the latest update, Bitcoin is trading at $109,044, reflecting a 0.2% increase from the previous day.

The market momentum appears to be slowing, as evidenced by a 21% drop in trading volume to $28.9 billion over the past day. Lower volume around an expiry event can increase sensitivity to sudden price moves as traders adjust their positions. The put-to-call ratio for this expiry is 1.05, indicating a fairly balanced scenario between bullish and bearish bets. Although it doesn’t strongly favor either direction, this even split and Bitcoin staying above the maximum pain level suggest some downside risk as contracts settle and traders unwind.

From a technical perspective, Bitcoin continues to hold within an upward trend. It remains above its 20-day and 10-day moving averages, which act as short-term dynamic support. BTC is also trading near the top of its Bollinger Bands, often a sign of buying strength, but also an area where rallies can lose steam if new buyers don’t step in. The MACD is in positive territory, indicating some underlying strength, even though momentum indicators are beginning to show signs of exhaustion. If Bitcoin drops below $107,500, it might move toward the $106,000 mark, a critical support zone that aligns with the maximum pain target and recent technical lows. However, if the price stays above $108,000 and breaks through $110,000 on increasing volume, it might indicate renewed bullish momentum and pave the way for another retest of the all-time high above $111,000.