All eyes in the crypto market are on tomorrow’s biggest Bitcoin option expiration in history.
Data analyst Murphy noted that approximately $23.6 billion worth of Bitcoin options will expire on the same day, potentially significantly increasing short-term volatility in the BTC price in the process.
According to Murphy, if a market maker cancels a hedge position during an option’s expiration, the temporary support and resistance levels formed by the option’s structure can lose their effectiveness. This could pave the way for sharp and rapid price movements for Bitcoin until all market participants reassess their positions and new funding structures are established.
The analysis argued that a speculative opportunity for a “short-term rebound” could be created if Bitcoin price retreats to its previous lows, i.e. in the $80,000 to $82,000 range. Murphy emphasized that sharp volatility seen during periods of liquidity scarcity does not necessarily signal the beginning of a new crash.
On the other hand, it has also been pointed out that signals of a “bullish divergence” are beginning to appear in the short term. This signal appears when the rate of price decline is stronger than the rate of capital outflow, indicating the possibility of a downward trend correction or temporary recovery.
The “price and capital inflow slope” metric used measures the relative change between Bitcoin price momentum and actual capital flows. Past cycles have often seen rapid price declines and rebounds, even as capital outflows have slowed.
The analysis noted that after four separate bullish divergence signals seen in 2021-2022 and 2024-2025, Bitcoin experienced recoveries of varying magnitudes and, in some cases, trend reversals. However, given that overall market sentiment remains in the ‘bear market recovery’ phase, a limited and short-term upside scenario seems more likely this time around.
*This is not investment advice.
