Bitwise’s Dragosch: Bitcoin could drop 20% to $48,000

Nate Dragosch, a Bitwise executive, warned this week that bitcoin could fall as much as 20% to about $48,000 as a cluster of options contracts approaches expiry.

Bitwise identified a ‘max pain' level at $48,000 based on options open interest. The term ‘max pain' denotes the strike where the largest number of options would expire worthless for buyers and leave option sellers advantaged.

The firm's view is based on how options markets work. Options give holders the right to buy or sell bitcoin at a set price by a set date. Market makers who sold those contracts often offset risk by trading the underlying asset.

When many contracts concentrate at one strike, hedging by market makers can create directional flows in the spot market. Bitwise warned that such hedging ahead of expiries could push the cash price to the strike with the largest open interest.

Bitwise framed the 20% projection as a scenario based on concentrated open interest and current market positioning, not on bitcoin's longer-term fundamentals.

Dragosch noted the outcome depends on how traders adjust positions, spot liquidity and other market drivers such as macroeconomic data or policy announcements. If liquidity is thin, hedging flows can have a larger effect; if buyers step in, the impact may be limited.

Market participants watch options expiries because clustered contracts have in some cases coincided with sizable price moves. Bitwise's note quantifies one possible short-term path based on available open-interest data and hedging dynamics.

The firm advised traders to monitor options open interest and expiry calendars as part of risk management ahead of the concentrated expiries.