The cryptocurrency market faced another wave of selling pressure on May 28, 2021, as Bitcoin tumbled below the $36,000 mark and approximately $2.1 billion worth of Bitcoin options contracts expired — capping off what has been crypto’s worst month of the year. The convergence of these two events created a perfect storm of volatility that left traders and investors scrambling to make sense of the rapidly shifting landscape.
TL;DR
- Bitcoin dropped 7% to approximately $35,997, with the broader market sliding in tandem
- $2.1 billion in Bitcoin options expired on Friday with a max pain price of $50,000
- Ethereum fell 9.3% to $2,501, while Dogecoin shed 4% to $0.32
- BTC had briefly reclaimed $40,000 on Wednesday before rolling over
- The expiry marked the smallest options volume of 2021 so far
Bitcoin Options Expiry: A $2.1 Billion Event
The options market played a central role in Friday’s price action. Roughly $2.1 billion in Bitcoin options contracts were set to expire, with the max pain price — the price at which the most options expire worthless — sitting at $50,000. With Bitcoin trading nearly 30% below that level at around $36,000, the expiry put significant downward pressure on an already fragile market.
This month’s options expiry was notably smaller than previous months, reflecting the broader retreat in crypto market activity throughout May. The reduced volume suggested that many traders had already deleveraged or exited positions during the sharp sell-off that began in mid-May, when Bitcoin crashed from its all-time highs near $64,000 down to the $30,000 range.
Bitcoin’s Bruising Week
Bitcoin was down 10.3% over the trailing seven days, according to data compiled by CryptoPotato. The week began with a dramatic plunge to $31,185 on Sunday, May 23 — the lowest level since late January. While buyers managed to close the daily candle above that level at $34,760, the damage to sentiment was already done.
A mid-week recovery saw Bitcoin surge back above $40,000 on Wednesday, May 26, briefly touching $40,765. However, the rally was stopped dead in its tracks at the 200-day moving average and a bearish .382 Fibonacci retracement level — two critical technical resistance zones. From there, sellers took control once again, driving BTC back down through $38,000 and ultimately to the $36,000 level by Friday.
The technical picture painted a clear narrative: Bitcoin was trapped in a battle between dip buyers and determined sellers, with each relief rally met with fresh selling pressure. Key support levels to the downside included $34,760, $33,520, $32,465, and the psychologically critical $30,000 mark.
Ethereum and Altcoins Join the Slide
Ethereum mirrored Bitcoin’s struggles, falling 9.3% on the day to $2,501. The world’s second-largest cryptocurrency was down 9.7% for the week, trading around $2,470. ETH had its own dramatic swing on Sunday, briefly dipping below $1,800 before closing above $2,100. A recovery to $2,891 on Wednesday proved fleeting, as ETH failed to break through the bearish .382 Fibonacci retracement and subsequently rolled over.
Even Dogecoin, which had enjoyed significant retail attention throughout 2021, was not spared from the carnage. The meme-inspired cryptocurrency fell 4% to $0.32, continuing its retreat from the speculative highs seen earlier in the month.
Cathie Wood and Goldman Sachs Weigh In
Despite the gloomy price action, prominent voices in traditional finance continued to engage with the crypto space. Cathie Wood, founder and CEO of Ark Investment Management, spoke at CoinDesk’s Consensus 2021 conference on May 27, arguing that Bitcoin has a place in a deflationary world. Wood suggested that emerging markets — where currencies are often linked to commodity price cyclicality — could ultimately drive Bitcoin outperformance as their populations shift into cryptocurrency.
Meanwhile, Goldman Sachs released a 41-page research note examining whether Bitcoin and Ethereum should be considered a legitimate asset class. The note reflected growing institutional interest in crypto even as prices pulled back sharply from their peaks.
Why This Matters
The May 28 options expiry represented a critical juncture for a market that had already endured one of its most brutal months. With $2.1 billion in derivatives expiring far below the max pain price of $50,000, the structure of the options market itself was contributing to downside volatility. For traders and investors, the key question was whether Bitcoin would hold the $30,000–$35,000 support zone or break down further into uncharted territory. The involvement of major institutional players like Goldman Sachs and Ark Invest, alongside the record-setting options expiry, underscored how significantly the crypto market had matured — even in the midst of a painful correction.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always do your own research before making investment decisions.
max pain at $50K with BTC trading $36K. market makers were printing money on those puts. retail was absolutely slaughtered this expiry
smallest options volume of 2021 and BTC still could not catch a bid. that told you everything about how much leverage had been flushed already
doge only dropped 4% while BTC tanked 7% and ETH 9.3%. say what you want about elon but doge had a bid that nothing else did in may