Volatility Ahead: More Than 50K In BTC Options Contracts Set to Expire

Bitcoin has had a rough March in any measuring stick, with the coin itself halving in value in the span of a week. However, as it stands now, Bitcoin might just go for another massive spike in volatility, making it a worrying time to buy Bitcoin. A substantial number of derivatives contracts are set to expire at the end of March, and multiple renowned analysts and technical indexes are predicting a bearish impulse because of it. It’s not all doom and gloom, though, as a sharp rebound is expected thereafter.

Some Relative Stability

During the past two days, Bitcoin has mostly been trading within a range of $6,500 and $6,780. However, the thing doesn’t seem to want to push higher than that, as the moment it hits the resistance point, it falls back to the support, before merely going back up in an endless series of give-and-take.

Bitcoin has tried to break out of this range of $270 yesterday, but the sheer amount of resistance achieved at $7000 caused the coin to collapse back into its current comfortable levels.

A Looming Threat

IntoTheBlock, an on-chain metrics provider, has given data that showed more than 340,000 addresses, all holding 236,000 BTC for $7,000. The supply barrier here has had a significant influence on the pioneer cryptocurrency, stopping it from growing more and pushing it back to the $6,500 range.

The past few days have seen relatively low levels of volatility these past few days. With Bitcoin’s price being stable, a new threat looms ahead, warning of incoming volatility. The crypto derivatives data analytics firm, Skew, has recently gone public with a statement on the 27th of March. This statement described the expiry of 49,400 BTC in outstanding derivatives contracts. This equates to about $328 million worth of BTC options open interest.

Looming Movements

With the upcoming quarterly expiry date, Su Zhu, the CEO of Three Arrows Capital, has stressed its importance and encouraged people to watch Bitcoin’s trends.

Upcoming quarterly expiry this Friday Mar27th will be very important to watch

~24k BTC and ~247k ETH OI outstanding across Huobi, Okex, Bitmex, and Deribit

Last yr market bounced quite aggressively from backwardation to contango after the expiry pic.twitter.com/SgBjxcNJOT

— Su Zhu (@zhusu) March 25, 2020

He explained that Bitcoin has a habit of experiencing high levels of volatility during events like these. He further stated that last year’s market experienced an aggressive bounce after the backwardation to contango after the relevant expiry. Zhu warns that another such scenario could take place, as all the warnings are there.

It seems that the crypto market isn’t done yet with its excessive price movement. With any luck, the crypto market as a whole will start to calm down, and business can return to normal.