Bitcoin prices reached their two-week low in the early New York session Thursday as focus shifted on the cryptocurrency’s record $6.1 billion options expiry on Friday.
The flagship cryptocurrency touched an intraday low of $50,305 before retreating upward. Its rebound level coincided with the 50-day simple moving average, a wave that had capped Bitcoin from extending its bearish on multiple occasions in recent history.
A lot of put options traders have extended their strike price target to $44,000. The market calls it a “max pain” level, indicating sellers with large enough capital in their hands that could force the bitcoin prices to $44,000 to meet their strike price to buy bitcoin cheaper.
The bullish outlook is that Bitcoin avoids a deeper downside correction throughout Friday, protecting a majority bullish options market from facing massive losses.
“This does seem plausible, given a surge of positive news over the last few days. For example, Bitcoin and Ether jumped yesterday, March 24th, after Tesla CEO Elon Musk said that the electric car company would start accepting crypto payments,” said Greg Waisman, the co-founder, and COO of the global payment network Mercuryo, in an email response to BlocDesk.
Bitcoin also has a piece of fundamental news backing its recovery related to Fidelity Investments filing an application with the SEC for an ETF product, he added.
More Bullish Cues
Mr. Waisman gave more reasons why Bitcoin could avoid a catastrophic decline to $44,000 in the next 24 hours.
The analyst referred to a massive BTC transfer worth $806 million from the Coinbase Pro wallets, which typically points to a massive institutional purchase. Meanwhile, Bitcoin also gained supporters after becoming a highly preferred option in Turkey after Lira’s collapse earlier this week.
“And, lastly,” explained Mr. Waisman, “Bitcoin usage in Nigeria seemingly won’t be banned after all, as the country’s government clarified its stance on the matter, giving green light to P2P trading.”
The only remaining headwinds appeared from the macroeconomic markets. The US dollar gained strength after the Labor Department data revealed that the jobless claims in the US fell to their pre-pandemic levels. Bitcoin typically trades inversely to the greenback.
Mr. Waisman noted that the “real recovery” would begin after Friday’s options expiry.