This week just got worse for Bitcoin () investors. Bitcoin suffered a flash crash that pushed the BTC price below $60,000. It was the first time since October 2024 that the BTC price fell below the $60,000 level. This price drop sent waves of panic across the Bitcoin market.
Bitcoin price quickly rallied above this key support level. However, there is still uncertainty in the air despite the swift relief bounce. A massive $10 billion Bitcoin options open interest contract expires this Friday with a max pain level at $72,000. With Bitcoin’s price below the max pain point, some analysts expect a steep decline.
Bitcoin Drops To 20-Month Low
Bitcoin’s sharp drop to a 20-month low triggered a crypto market liquidation. Sellers met and broke the important $60,000 price support level for the first time since October 2024.
The price drop caused massive long liquidations. It was intensified by a sell-off, hawkish Federal Reserve stance and global risk-off sentiment. As usual, famous critics such as Peter Schiff promptly jumped on the bear market and labeled the selling-off as clear evidence of a crypto bubble popping.
Even with the massive amount of bearish momentum, the asset quickly found buyers around its local lows and recovered quickly above the $61,700 level, according to CoinMarketCap.
Bitcoin Whales Sell 45,000 BTC in 8 Days
This steep market correction was not a random retail panic. On-chain data reveals that large ecosystem players actively coordinated the downward pressure. A group of crypto whales with holdings of 10 to 10,000 BTC “sold with a lot of force,” according to market analytics firm Santiment.
The group in total dumped 45,074 BTC over a period of 8 days. Numerous factors argue against this distribution being a coincidence and for it to represent accidental liquidations, and instead for institutional de-risking and strategic profit-taking.
Responsible for these big holders, the break of the $60,000 support was treated as a warning to reduce exposure as regulations in Washington abound.
Investors Look To $10 Billion Options Expiry on Friday
The immediate future of this fragile recovery heavily rests on a massive derivatives showdown. A monstrous $10 billion Bitcoin options open interest contract expiry is locked in for Friday.
Options expiries of this size fundamentally force market makers to aggressively re-hedge their positions, usually injecting massive price swings into spot markets. Traders are carefully tracking current max pain price points. The final outcome of Friday’s massive settlement will likely dictate whether the current relief rally gains real bullish traction or crumbles into a deeper dump.
BTC Technical Indicators Turn Bearish
From a purely structural standpoint, the short-term outlook looks overwhelmingly bearish. Investing.com technical indicators highlight that Bitcoin’s primary indicators and moving averages have firmly flipped to strong bearish on all major timeframes.
MA5, MA10, MA100 and MA200 are all flashing sell signals. For an up move, Bitcoin price needs to clear immediate resistance levels at $62560.5 and $62343.4. At the same time, bulls will need to defend the support levels at $61091.5 and $60597.6 to prevent another drop below the $60000 support level.