The Impact of Bitcoin Options Expiry on Crypto Market Volatility
The Bitcoin options market is currently anticipating the expiry of 24,000 contracts on August 16, with a put-call ratio of 0.83. Notably, this options expiry represents only 10% of the total open positions in the market. Despite a downturn in inflation data, Bitcoin is facing challenges in surpassing the $61,300 resistance due to macroeconomic factors.
After encountering significant resistance at the $61,300 level earlier this week, the price of Bitcoin fell below $57,000 on Thursday before making a partial recovery. All eyes are now on the upcoming Bitcoin options expiry on Friday, which will serve as a battleground between bullish and bearish traders.
The imminent Bitcoin options expiry is expected to conclude with a put-call ratio of 0.83 and a notional value of $41.4 billion, accompanied by a max pain point of $59,500. The current put-call ratio, nearly reaching 1, indicates a notable struggle between bullish and bearish sentiments. Presently, the price of Bitcoin is trading at a 5% decrease, amounting to $58,077, with technical indicators pointing towards a potential further decline to $54,000.
It is important to note that this current options expiry only represents a small fraction, at 10%, of the total open positions in the market. The subsequent options expiries in August, September, and December each account for slightly over 20%, reflecting a balanced and resilient distribution of options terms. This suggests a potential decrease in market volatility for the future, indicating a shift toward stability in the options market.
In addition to Bitcoin options, a total of 184,000 Ethereum (ETH) options are also set to expire, with a put-call ratio of 0.80, a notional value of $470 million, and a max pain point of $2,650. The price of Ethereum is also facing selling pressure, down 3.47% and currently trading at $2,587.96, with a market cap of $311 billion.
Despite a decline in CPI inflation data, Bitcoin bulls have struggled to regain momentum amidst the current market volatility. 10x Research has observed that macroeconomic factors have hindered Bitcoin’s rally to $66,000, leaving traders puzzled by the discrepancy between the performance of US tech stocks and the underperformance of the crypto market.
According to the 10x Research report, Bitcoin may retreat to a trading range between $50,000 and $60,000. The cryptocurrency is encountering strong resistance within the $60,000-$61,000 range, potentially leading to oversold technical indicators resetting and increasing the likelihood of Bitcoin revisiting its August 5 low near $50,000.
In conclusion, the upcoming Bitcoin options expiry has the potential to significantly impact market volatility and the future stability of the crypto market. The ongoing battle between bulls and bears, combined with macroeconomic challenges, will play a pivotal role in shaping the trajectory of Bitcoin’s value in the days ahead. As investors eagerly await the outcome of the options expiry, market sentiment remains on edge as traders navigate the complex dynamics of the crypto market.
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