As $6.6 billion worth of options expire, BTC is trading at a low of $60,000. However, QCP Capital is confident in defending this level.
The sustained negative market sentiment in June has ultimately pulled Bitcoin (BTC) back to the $60,000 range low. This is the fifth time BTC has retested this level, dropping to as low as $5,600 and $5,800 in some instances.
However, over $10 billion worth of crypto options are set to expire on June 28, with around $6.6 billion being Bitcoin options. As a result, more volatility is expected, and the support at the $60,000 range low for BTC could be broken.
The maximum pain for BTC options is at $57,000, which is typically the level at which market makers (option sellers) face the least financial risk before the options expire.
In other words, market makers tend to push the price towards the maximum pain level to minimize losses.
BTC price tends to gravitate towards this level, but other factors are also at play. Therefore, according to the options market, BTC could drop below $60,000.
Defending $60,000 for BTC?
However, despite the anticipated volatility, cryptocurrency trading and hedge fund firm QCP Capital remains firm in its belief that BTC will defend the $60,000 support.
“We believe the support at $60,000 will be defended.”
The company states that the selling pressure from the German government has eased, and there has been an improvement in the inflow of funds into the US BTC ETF. According to Soso Value’s data, the BTC ETF broke its seven-day streak of outflows on Tuesday and recorded positive net flows in the past three days.
However, the aforementioned optimistic outlook could also be affected by BTC short-term investors holding BTC at a loss, which could trigger panic selling if BTC further declines.
An anonymous CryptoQuant analyst pointed out that BTC has fallen below the short-term realized price of $6,260, which could increase selling pressure.
“If the price cannot quickly rise above a certain level, it is likely to become a resistance level for future prices.”
On the other hand, an analysis by AMBCrypto of the liquidation heatmap shows key liquidity clusters on both sides of the price trend (marked in orange). However, liquidity is slightly biased towards $6,020 and $60,400.
Above the price trend, a crucial cluster is at $626,000, aligning with the short-term realized price. The price trend also tends to shift towards areas of significant liquidity.
Overall, the data suggests that although the market may manipulate the price to $57,000, BTC can recover to $60,000 and retest $62,600.