Bitcoin Explodes Options While FED Rates Persist!

March 29, 2024 will forever mark the history of cryptocurrencies. This day will be remembered as the day when bitcoin faced one of its greatest challenges to date! Largest quarterly options expiration ever. Despite the colossal stakes, the crypto queen has once again proven its resilience by keeping its price above the symbolic threshold of $69,000.

The dizzying figures of Bitcoin's record expiration

The data surrounding this event is dizzying. Indeed, no less than $15.1 billion in crypto options expired on March 29 on the Deribit exchange platform. To be more precise, 9.53 billion represented the notional value of Bitcoin options. With a put/call ratio of 0.84, the potential “maximum pain” price was $51,000. These astronomical figures foreshadowed significant upheavals on the markets. However, against all expectations, the impact on prices remained relatively measured, as noted by Andrey Stoychev of Nexo. Indeed, with delta hedging essentially complete, fluctuations have been limited.

Faced with this flood of expiring options, bitcoin reacted with disconcerting serenity. Not only is its price remained stable above $69,000, but it even managed to break its former all-time high. A feat analyzed by Rekt Capital as potentially signifying the end of the pre-halving correction. Furthermore, Hao Yang from Bybit recalled that an indicator like “maximum pain” has only a limited influence on the real dynamics of prices, like a sophisticated PC case having only a moderate impact. the performance of the internal hardware.

Towards a new paradigm in derivatives markets

The absence of the “max pain price” calls into question certain premises. Traditional technical analysis models seem to have shown their limits in the face of the growing maturity of bitcoin. New approaches are now necessary to understand these changing markets.

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In his speech in San Francisco, Jerome Powell adopted a measured tone regarding the upcoming rate cuts. The Fed chair indicated there was no “urgency” to reduce borrowing costs despite core PCE inflation in line with expectations in February. A cautious pace of future rate cuts appears to be emerging.

For bitcoin, this could temporarily weigh on its valuation in a context of persistently high rates. Nevertheless, its solid fundamentals and growing institutional appetite should allow the crypto queen to resist. The next few weeks will be crucial to gauge the impact of Powell's speech on BTC prices.

The record expiration of options Bitcoin of March 2024 will go down in history as a successful stress test for the crypto queen. By resisting this unprecedented challenge, bitcoin is consolidating its status as a safe haven against headwinds. Now firmly anchored in the global financial landscape, it is positioned as an essential asset, as reliable as the most established traditional investment classes. A new milestone reached in the conquest of maturity for this ongoing monetary revolution.

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