Bitcoin Holds Above $107,000 Ahead of Options Expiry

Bitcoin maintained a tight trading range just above $107,000 during U.S. hours on Thursday, ahead of a significant options expiry scheduled for Friday. The top cryptocurrency was trading at approximately $107,500, marking a slight decrease of 0.2% over the past 24 hours. Concurrently, the CoinDesk 20 index, which tracks the top 20 coins by market capitalization excluding stablecoins and exchange coins, experienced a 0.9% decline during the same period.

Friday's options expiry on the derivatives exchange Deribit is anticipated to be substantial, with 38% of Bitcoin options contracts set to expire. The max pain price, a level at which the most options contracts are set to expire worthless, is identified at $102,000. This price point is crucial as it indicates the level where the majority of options traders would incur the most losses if the price of Bitcoin deviates significantly from it.

The put-call ratio stands at 0.73, suggesting a slight bias towards call options, which are bets on the price of Bitcoin rising. However, the put-call skews show no clear directional positioning for traders in the short term, indicating a lack of consensus on whether the price of Bitcoin will rise or fall in the near future. This ambiguity is further supported by the low open interest in perpetual contracts and the relatively depressed Bitcoin implied volatility, which suggests limited expectations for sharp price movements leading up to Friday's expiry.

Bitcoin’s implied volatility, as measured by Deribit DVOL, has decreased from 50% in April to 38%, signaling growing confidence in the cryptocurrency's role as a macro-hedge. This drop in volatility indicates that traders are less concerned about significant price swings, which could be interpreted as a sign of market stability. However, the $105,000 level remains pivotal for Bitcoin, with technical indicators suggesting caution if this support level fails.

Despite the overall market stability, some crypto-related stocks experienced gains on Thursday. Core Scientific, a bitcoin mining company, saw a surge of over 33% following rumors that it may soon be acquired by AI Hyperscaler CoreWeave. Other crypto stocks, including Circle, Coinbase, Riot Platforms, and Hut 8, also posted gains ranging from 5% to 7%. However, MicroStrategy, a company known for its significant Bitcoin holdings, saw a nearly 1% decrease in its stock price.