Bitcoin faces $62K max pain as $1.75B options expiry tests support

Bitcoin's $62,000 support faces its sternest test yet as $1.75 billion in crypto options expired with traders loading up on downside protection.

Bitcoin slipped toward $62,700 as $1.75 billion in Bitcoin and Ethereum options expired, with the max pain level at $62,000 reflecting bearish positioning.

The 25-delta skew on Bitcoin options sits at 18%, showing a sustained bias toward puts, according to Glassnode data cited by CoinDesk. That remains well below the 40% peak seen during the FTX collapse in 2022, signaling caution rather than panic.

The expiry features a tightly contested setup. Calls up to $62,500 total $137 million in open interest, while puts above $61,000 stand at $121 million, per Deribit data. Bitcoin bulls would gain a $190 million advantage with a move above $63,500 before the 8:00 UTC cutoff, while bears hold a $100 million edge below $61,000.

The $62,000 support level is reinforced by balanced put-to-call volumes and restrained put buying in recent sessions, according to Laevitas data. But sustained upward momentum requires a macro catalyst that has yet to materialize.

The macro backdrop has turned increasingly hostile for risk assets. The US 10-year Treasury yield pushed toward 4.6%, its highest in seven weeks, as investors priced in concerns over expanding government debt and the prospect of further monetary policy expansion. Higher bond yields pressure Bitcoin by raising the opportunity cost of holding non-yielding assets.

Spot Bitcoin ETFs recorded $85 million in net outflows on Wednesday, ending a three-day inflow run that had pulled in roughly $509 million, according to SoSoValue data. BlackRock's IBIT shed $59 million while Grayscale's GBTC lost $64 million, though Grayscale's mini BTC fund attracted $53 million in inflows.

Oil prices provided a partial offset. WTI crude retreated toward $70 per barrel as markets looked past the latest Iran tensions, easing recession fears that had boosted demand for fixed-income assets. A sustained decline in energy costs could shift capital back into risk-on markets, including crypto.

The options market's message is one of caution rather than alarm. At 18%, the 25-delta skew signals put demand that is elevated but far from the panic levels of prior crypto bear markets. Bitcoin's ability to hold $62,000 through the expiry will determine whether the current range resolves higher or breaks lower in the sessions ahead.

This article is for informational purposes only and does not constitute investment advice.