Bitcoin (BTC-USD) is gearing up for potential volatility as $7.8 billion in options contracts are set to expire on January 31, according to Deribit. With Bitcoin currently trading above the max pain price of $98,000, traders and market makers are bracing for sharp price movements. The max pain level represents the price at which option buyers face maximum losses, while market makers profit the most. Deribit CEO Luuk Strijers added that speculation about a Bitcoin strategic reserve announcement is adding another layer of market anticipation.
Meanwhile, Bitcoin whales are back in accumulation mode, increasing their holdings by 2% between January 14 and 17, according to CryptoQuant. This marks the largest monthly growth rate since mid-December and follows President Trump’s inauguration, with expectations of pro-crypto policies.
However, while institutional demand is rising, retail interest in Bitcoin is cooling. CryptoQuant data shows apparent demanda measure of production versus inactive inventoryhas dropped from 279,000 BTC in early December to 75,000 BTC today. Analysts say retail participation needs to rebound for Bitcoin to sustain a strong rally.
This article first appeared on GuruFocus.
