Bitcoin may see a spike in short-term price swings as nearly $3 billion worth of options contracts approach expiration on July 4.
According to data from Deribit, the leading crypto options exchange, these contracts are set to expire at 08:00 UTC, with the “max pain” price currently pegged at $106,000. This price level reflects the point where most options, both calls and puts, expire with little to no value, often resulting in the least payout to traders and the highest benefit to sellers.
When expiry nears, price action sometimes moves toward this level, especially when it’s within reach. Bitcoin (BTC) is trading at $109,044 as of press time, up 0.2% from the previous day.
The market momentum may be slowing, as shown 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 point strongly in 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’s still 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.
