On May 3, options contracts for Bitcoin and Ether worth a combined total of $2.4 billion are set to expire, potentially escalating market volatility.
Bitcoin options are derivatives that let investors bet on Bitcoin’s price fluctuations without holding the actual cryptocurrency.
These contracts are available in two forms: call and put options.
Call options grant the right to buy Bitcoin at a predetermined price before a specific date, whereas put options provide the right to sell it at an agreed-upon price before the contract expires.
The put/call ratio is a common metric used by investors to gauge market mood.
A dominance of put purchases suggests bearish sentiment, whereas more call buys imply a bullish outlook.
A put-to-call ratio below 0.7 signals bullish conditions, but a ratio above 1 indicates bearish sentiment.
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According to data from the Deribit exchange, 23,367 Bitcoin contracts valued at $1.39 billion will expire on May 3.
The put-to-call ratio for these Bitcoin options is currently 0.5, with a maximum pain point—a price level causing the most significant potential loss for the most holders—pegged at $61,000.
Additionally, 334,248 Ether contracts, representing a notional value of $1 billion, are due to expire shortly.
These contracts have a put-to-call ratio of 0.37 and a maximum pain point set at $3,000.
Historically, the expiration of such contracts leads to transient fluctuations in the cryptocurrency spot market.
In recent weeks, both Bitcoin and Ether have been under bearish pressure.
Bitcoin’s value recently dropped below $60,000, a nearly 20% decline in a week following its halving event, while Ether dipped below $2,900.
Typically, the market recovers from this expiry-induced volatility within a few days.
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Bitcoin surged to $64,500 on May 4 during after-hours trading, marking fresh gains in its price trajectory.
According to data from Cointelegraph Markets Pro and TradingView, Bitstamp recorded a new local high of $64,522, setting a new peak for May.
The momentum, fueled by positive United States employment data, continued to build until the daily close.
This was further supported by promising signs of recovery in the crypto market, notably with the Grayscale Bitcoin Trust (GBTC) witnessing its first inflows in nearly three months.
As of the time of reporting, BTC/USD had seen a 5% increase month-to-date, as per CoinGlass data, contrasting with the 15% losses experienced in April.
In response to the market movement, popular trader Daan Crypto Trades expressed cautious optimism, stating,
“Had a great push into the market close yesterday.”
However, he emphasized patience, refraining from adding positions during the weekend until further clarity emerged.
Analysts noted a noticeable deviation between the latest CME Group Bitcoin futures closing price and BTC/USD, suggesting a potential future correction to fill the gap.
Despite the weekend’s impressive performance, concerns lingered regarding the market’s resilience without traditional financial participants.
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Keith Alan, co-founder of trading resource Material Indicators, highlighted the risk of a correction due to thin order book liquidity.
Meanwhile, trader and commentator Credible Crypto suggested that shorting BTC might be favorable below the “main resistance” level around $69,000.
He outlined two potential scenarios for BTC price action, indicating that current levels lacked sufficient liquidity.
Credible Crypto also noted that long positions in BTC would be attractive if BTC/USD dipped below $56,000, suggesting a strategic entry point for investors.
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Bitcoin is currently struggling to surpass the $60,000 mark, facing significant resistance that is hindering its price rebound, despite recovering up to 6.2% from the week’s lows.
Analysis from Cointelegraph Markets Pro and TradingView highlights that BTC/USD has yet to breach crucial trendlines.
The cryptocurrency has seen a 23% decline from its peak, with recovery prospects appearing slim through April and May.
Former BitMEX CEO Arthur Hayes has predicted that Bitcoin will continue to trade within a range below $70,000 until August, emphasizing the importance of first reclaiming the $60,000 level.
However, this mark remains well-defended by existing trendlines.
Particularly challenging for Bitcoin is its 100-day moving average (MA), which, as of May 3, stands at $59,930.
Historically, this trendline has supported the market since October 2023 and helped sustain prices during the early 2023 bull market phase.
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Yet, recent patterns show Bitcoin closing full daily candles beneath this average, indicating a downward shift.
Material Indicators, a trading resource, observed that this average is presenting strong technical resistance.
They noted, “Reclaiming the 100-Day Moving Average would be a big deal for Bitcoin Bulls that could lead to a short squeeze,” as stated by co-founder Keith Alan on the social platform X.
Another significant obstacle is the short-term holder realized price (STH-RP), which reflects the average cost basis for Bitcoin holders who have held their positions for 155 days or less.
This metric has repeatedly acted as a robust support during recent weeks and throughout much of the bull market since early 2023.
As of May 1, STH-RP was recorded at $59,684, closely aligning with the critical $60,000 resistance zone.
Caleb Franzen, CEO of Cubic Analysts, also pointed out the significance of this resistance level in his commentary on X.
He mentioned that for a ‘risk-on’ scenario, a daily closure above $61,000 is crucial.
“Lots of work to do,” he concluded, underscoring the challenges that lie ahead for Bitcoin to regain its upward momentum.
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On April 23, the Bitcoin network achieved a new record with the highest number of confirmed daily transactions, just three days after entering a new halving cycle that started on April 20.
This surge brought the total to over 1.6 million unique transactions processed between various senders and receivers.
Data comparisons from sources such as Blockchain.com and Glassnode have linked the spike in transactions to the launch of Bitcoin Runes.
This new offering serves as an alternative to the existing Bitcoin Ordinals and the BRC-20 protocol on the Bitcoin blockchain, capturing a significant portion of the daily transaction volume.
Notably, Runes accounted for 81.3% of all Bitcoin transactions on the day of the record.
Despite this initial dominance by Runes, Bitcoin (BTC) transactions regained their majority status over the network by April 29, with BTC transactions making up 77.8% of the total, while Runes transactions had decreased to 18.8%.
The remainder of the transaction volume was made up of ordinals at 1.2% and BRC-20 transactions at 2.3%.
The influx of Bitcoin Runes transactions has proven beneficial for the mining sector. Major U.S. mining firms such as Stronghold Digital Mining and Marathon have reported positive impacts from the Runes transactions, both financially and functionally, as communicated to Cointelegraph.
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Since the halving, Rune transactions have contributed over 1,200 BTC in transaction fees to miners.
Although the excitement surrounding Bitcoin Runes seems to be waning, Ignas, a pseudonymous decentralized finance (DeFi) researcher, sees continued potential in this market.
In a post dated April 17 on platform X, Ignas commented, “Runestone, RSIC, and PUPS are already pumping, promising holders shiny new Rune token airdrops.
And FOMO threads keep coming. But, like the NFT frenzy post-JPEG reveal, the market could soon cool off.”
Runes and BRC-20 tokens represent new fungible token standards designed to expand Bitcoin’s utility within the emerging sector of Bitcoin DeFi, or BTCFi.
This initiative marks a significant shift towards integrating more complex financial functions directly on the Bitcoin blockchain, illustrating a growing trend of innovation within the cryptocurrency landscape.
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The notable Bitcoin whale known as “Mr. 100” recently made a significant purchase of Bitcoin, marking his first buy since the Bitcoin halving event in April 2024.
As the Bitcoin price briefly dipped to $56,000, Mr. 100 added over 4,100 BTC to his holdings, purchased around the $58,000 level.
This acquisition, valued at approximately $242 million, was highlighted by the analysis of on-chain data from Bitinfocharts, brought to attention by user HODL15Capital.
This transaction comes after a hiatus since April 19, the day before the halving, during which the whale did not acquire any additional Bitcoin.
The “Mr. 100” wallet, which began receiving regular BTC deposits following the November 2022 collapse of FTX, had been consistently accumulating at least 100 BTC daily since mid-February, excluding the period right after the halving.
Currently, “Mr. 100” holds over 65,155 BTC, making him the 12th-largest Bitcoin holder. The value of his wallet now exceeds $3.86 billion, with unrealized profits of $1.4 billion, a 33% increase from the average purchase price of $36,572 per BTC.
Amid this buying activity, market analysts have been debating the trajectory of Bitcoin’s price.
Analyst Rekt Capital suggested in a May 2 video analysis that the current market conditions represented a prime buying opportunity, explaining, “Whenever we’d get close to a 20% downside, that was typically a fantastic buying opportunity before price reversals towards the upside.
So if we’re deeper than 20%, it is an even better opportunity than we had this cycle, because the deeper we go the closer we get to a bottoming in Bitcoin’s price action.”
Other experts, like Jag Kooner from Bitfinex, predict a short-term consolidation in Bitcoin prices.
Kooner anticipates a trading range with significant swings over the next couple of months, influenced by macroeconomic factors.
He told Cointelegraph, “We could see a one-to-two-month consolidation in Bitcoin prices, trading in a range with swings of $10,000 on either side.
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We expect the positive impact of the halving, which has brought about a reduction in Bitcoin supply, will be seen in later months.
At this point, the economy is also expected to be performing better, having achieved a soft landing and avoiding a recession, providing further impetus to crypto assets.”
The $52,000 mark is seen as a crucial support-resistance level on Bitcoin’s weekly chart. A close above this threshold would likely indicate potential for further gains, according to crypto trader Marco Johanning.
Further context about the “Mr. 100” address was provided by Crystal Intelligence to Cointelegraph, identifying the address as associated with the Upbit exchange.
The firm clarified, “We have found that the number and value of transactions associated with this wallet are indicative of a VASP-type service.
‘Additionally, we can confirm with high accuracy that the incoming transactions originate from Upbit, and these have maintained a consistent value since the collapse of FTX.”
This analysis was reinforced by the findings of Mai, an on-chain sleuth, who noted the operational similarities between Mr. 100’s transactions and Upbit’s typical activity with altcoins.
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Bitcoin surged past $64,000 before the weekly close on April 28, while altcoins aimed for a rebound. Data from Cointelegraph Markets Pro and TradingView showed increased momentum in Bitcoin’s price over the weekend.
After hitting a weekly low of $62,400, BTC/USD reversed its course and maintained levels around $63,500 at the time of reporting.
Altcoins also saw positive performance during off-hours trading, with the total altcoin market cap rising by approximately 1% for the day.
Popular trader Skew, commenting on recent market trends, noted the bounce in altcoins but expressed caution regarding their tendency to peak early in the week.
Skew anticipated sell-side pressure on Bitcoin around its range highs, which could hinder further bullish advances.
Trader and commentator Moustache expressed optimism about an upcoming “altseason,” suggesting it could rival the market’s performance during the 2017 all-time highs.
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He pointed to the monthly dominance chart of the stablecoin Tether, indicating a potential “backtest” after breaking below a rising trendline earlier in the year.
Market participants awaited the introduction of “TradFi” trading, such as Bitcoin futures, for additional insights into the crypto market’s trajectory.
Fellow trader Daan Crypto Trades shared positive sentiments about weekend price action, anticipating limited movement in Bitcoin until after the reopening of CME.
Despite consolidating below previous all-time highs, Bitcoin’s monthly chart drew optimism from trader Alan Tardigrade.
Tardigrade highlighted Bitcoin’s position above the Triangle Top on the monthly chart as a bullish indicator, emphasizing the necessity of consolidation for a sustained bull run in the future.
He compared Bitcoin’s current situation to the pre-breakout period of the Nasdaq Composite Index in 2013, suggesting potential for significant growth ahead.
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The launch of a spot Bitcoin exchange-traded fund (ETF) in Hong Kong on April 30 triggered a significant decline in Bitcoin’s price.
Despite expectations of substantial demand, including projections of $140 million, the opening day’s total trading volume, incorporating Ether ETFs, amounted to only $12.4 million.
Consequently, the premium on Bitcoin futures plummeted to its lowest point in five months, indicating a potential bearish trend.
Various factors have contributed to this negative pressure on Bitcoin’s price.
Weak macroeconomic conditions and uncertainties surrounding U.S. spot BTC ETF flows have been prominent among them.
Investors’ confidence in the United States Federal Reserve’s ability to implement two interest rate reductions in 2024 has waned, with Fed Chair Jerome Powell scheduled to deliver post-meeting remarks on May 1, prompting cautious market behavior.
Continued net outflows from U.S.-listed spot Bitcoin ETFs over four consecutive sessions have raised further concerns.
Investors have been withdrawing funds from the Grayscale GBTC ETF due to its high fees, while the Blackrock IBIT ETF has experienced minimal activity.
This trend suggests diminishing interest in such investments within the U.S. market despite the lackluster performance of the Hong Kong spot ETF.
Previously, cryptocurrency ETFs based on futures contracts listed on the Hong Kong exchange (HKEX) had attracted substantial net inflows totaling $529 million in the first quarter of 2024.
Hence, the disappointing debut of the spot instrument on April 30 came as an unexpected setback. Analysts, including Bloomberg’s Eric Balchunas, speculate that poor timing may have contributed to the low trading volumes.
The broader financial landscape also played a role, with the S&P 500 poised to register its first negative monthly performance in six months in April, and yields on U.S. 5-year Treasury notes rising from 4.2% to 4.7%.
Market participants often exit fixed-income positions amid fears of rising inflation or expectations of continued
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The Bitcoin market has experienced a significant downturn following its fourth halving, confounding expectations of a surge similar to previous cycles.
Since the halving event on April 20, Bitcoin’s value has plummeted by 11%.
It was trading around $64,000 at the time of the halving, briefly climbed above $67,000 two days later, but then dropped to below $57,000 by May 1, as per CoinGecko.
Currently, the price stands at $57,362, marking a 7% decrease over the last 24 hours and a 17% decline over the month.
This downturn has surprised market observers who anticipated a rise post-halving, in line with historical trends where significant rallies often followed such events.
For instance, after the 2016 halving, Bitcoin surged approximately 3,000% within 17 months, achieving a then-record high of $20,000 in December 2017.
This year’s halving diverges from previous patterns due primarily to an unprecedented bull run leading up to the event, which saw Bitcoin reach new highs.
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“What’s unique about this latest Bitcoin halving is the incredible bull run and price action leading up to it.
“Even considering this recent pullback, Bitcoin has still been up 35% since the start of the year,” Mati Greenspan of Quantum Economics explained to Cointelegraph.
Greenspan also reasoned that the recent drop was predictable, given broader economic pressures and market trends, remarking, “Considering the expectation of yet another Fed pivot and what’s happening in the stock market, Bitcoin’s current price action is hardly a surprise.
“We’ll be a lot smarter about that later today, though.”
Predictions had been made as early as March 2024 by analysts at JPMorgan, suggesting a potential decline in Bitcoin’s price to around $42,000 post-halving.
Markus Thielen, CEO and head analyst at 10x Research, forecasts a further dip to $52,000. Thielen attributes the previous rally mainly to substantial inflows into Bitcoin ETFs, which have significantly reduced recently.
Despite the current decline, some experts, including investment researcher Lyn Alden, believe there are compelling reasons, beyond just the halving and U.S. ETFs, for Bitcoin to achieve new heights in 2024.
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Bitcoin‘s trajectory remains a subject of fervent speculation, with diverging views on whether its recent surge to $70,000 constitutes the peak of its current cycle.
Veteran trader Peter Brandt proposes an “exponential decay” pattern, indicating that Bitcoin’s successive cycles have seen diminishing peaks, with each reaching approximately 20% of the previous cycle’s peak gain.
Brandt estimates the current cycle’s top at $70,000, a mark already surpassed in March when prices briefly exceeded $73,000.
However, he acknowledges a 25% likelihood that Bitcoin has already crested this cycle.
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Giovanni Santostasi, CEO of Quantonomy, rebuts Brandt’s theory, citing insufficient data for robust statistical analysis.
Instead, Santostasi proposes a model based on long-term power law behavior, projecting a fourth cycle peak around December 2025 at approximately $210,000, with a projected bottom for the subsequent cycle around $83,000.
Numerous experts offer their own predictions, with Swyftx lead analyst Pav Hundal foreseeing Bitcoin doubling by the 2028 halving, reaching an estimated $120,000.
Laurent Benayoun, CEO of Acheron Trading, anticipates a potential cycle peak of $180,000. Fidelity Digital Assets, meanwhile, revises its medium-term outlook for Bitcoin, asserting that it is “no longer cheap.”
The current price of Bitcoin stands at $62,528, a 15% decline from its mid-March all-time high.
Despite the variance in forecasts, the cryptocurrency market continues to captivate investors and analysts alike, with each theory offering its own perspective on Bitcoin’s trajectory and potential future peaks.
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The Depository Trust and Clearing Corporation (DTCC), a key player in financial services offering clearing and settlement services, has declared its decision not to allocate any collateral to exchange-traded funds (ETFs) linked to Bitcoin or other cryptocurrencies, and will not extend loans against them.
Effective April 30, 2024, DTCC will enact alterations to collateral values for specific securities during its annual line-of-credit facility renewal, potentially impacting position values in the collateral monitor.
This announcement made on April 26 signifies that ETFs and analogous investment instruments backed by Bitcoin or other cryptocurrencies will be deprived of any collateral value, resulting in a complete reduction of 100% in their collateral value.
However, as cryptocurrency enthusiast K.O. Kryptowaluty elucidated in a post, this decision will solely affect inter-entity settlement within the line of credit system.
A line of credit represents a borrowing agreement between a financial institution and an individual or entity, permitting the borrower to access funds up to a predetermined credit limit, with interest typically applied solely to the borrowed amount.
According to Kryptowaluty, leveraging cryptocurrency ETFs for lending and as collateral in brokerage activities will proceed unaffected, contingent on the risk tolerance of individual brokers.
While DTCC has taken a stance against crypto ETFs, the sentiment is not mirrored across all traditional players.
Goldman Sachs’ clients have reentered the crypto market in 2024, propelled by revived interest post the approval of spot Bitcoin ETFs.
READ MORE: Hong Kong Approves First Wave of Spot Bitcoin and Ether ETFs for Trading
The debut of spot Bitcoin ETFs in the United States has ignited escalating institutional interest in this investment vehicle.
Within a mere three months of their introduction, all U.S.-based Bitcoin ETFs have amassed over $12.5 billion in assets under management.
In February, an estimated 75% of fresh Bitcoin investments stemmed from the 10 spot Bitcoin ETFs greenlit in the U.S. on Jan. 11.
Nevertheless, net inflows into the ETFs have recently decelerated. Various ETF issuers have reported substantial outflows of late.
As per Farside Investors, spot Bitcoin ETFs in the U.S. witnessed a net outflow of $218 million on April 25, following a $120 million outflow the prior day.
Grayscale’s GBTC ETF observed a notable single-day outflow of $82.4197 million. Data from Farside indicates a significant total net outflow from GBTC, tallying up to $17.185 billion.
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