As a seasoned analyst with over two decades of market experience under my belt, I find myself intrigued by the current state of Bitcoin (BTC). The recent selling pressure post-US Fed meeting and the upcoming options expiry on August 2 have created an interesting conundrum for investors.
After the US Federal Reserve’s meeting where rates remained at 5.25%, Bitcoin‘s price started dropping due to selling activity. Currently, it hovers around $64,000 with significant fluctuations over the past day. Today, everyone is looking forward to the expiration of Bitcoin options.
Bitcoin Options Expiry
According to Greeks.Live’s latest data, over 37,000 Bitcoin options are set to expire today, August 2. This large number suggests significant shifts in the market. Today’s BTC options expiry features a put-call ratio of approximately 0.58, a Maxpain point at around $66,000, and an estimated total value of $2.4 billion.
Recently, the cryptocurrency market has been facing a slump, following the introduction of the spot Ethereum Exchange Traded Fund (ETF) and overall outflows. Despite significant events, major implied volatilities (IVs) have dropped significantly, as indicated by the Dvol index reaching its lowest points in 2024. This suggests that the market’s expectations are relatively low after the ETF launch.
In contrast, U.S. stocks have been lagging recently, suggesting a lack of significant momentum to boost the market in August. Many financial analysts predict that the significant market movement will occur following the Federal Reserve’s interest rate reduction in September. Consequently, some large altcoin investors are taking advantage of price drops by buying up in preparation for the rate cut.
BTC Liquidations Before Options Expiry
Over the past day, Bitcoin experienced significant fluctuations and dropped below $62,000 before rebounding. As a result of this dip, approximately $2.5 billion was lost due to liquidations in leveraged long positions. Notably, prominent crypto analyst Ali Martinez predicts that if Bitcoin rises to $70,440, short sellers could face potential losses of around $2.4 billion from their short position liquidations.
In this recent drop, many enthusiastic Bitcoin investors suffered significant losses (or were “wiped out,” informally), as per data from @coinglass_com. Over $2.5 billion worth of highly leveraged long positions were forced to close when Bitcoin fell below $63,000!
Now, bears are getting cocky. But nearly $2.40 billion in leveraged short positions will be…
— Ali (@ali_charts) August 1, 2024
Conversely, it appears that large Bitcoin investors, often referred to as “whales,” are actively purchasing when prices drop. According to SpotonChain’s data, a fresh whale with the wallet address “bc1qh” has removed 4,600 BTC, equating to a massive $291 million, from Bitfinex at approximately $63,209 per coin.
A freshly identified whale (“bc1qh”) recently withdrew approximately 4,600 Bitcoin (equivalent to around $291 million USD) from Bitfinex during a recent price drop within the last 8 hours, as the value of each Bitcoin was roughly $63,209.
Lately, we’ve spotted another group of whales (possibly a single entity) withdrawing approximately 3,910 BTC (equivalent to $257 million USD) from Bitfinex since June 12th. The most recent withdrawal occurred just 3 days ago.
Is…
— Spot On Chain (@spotonchain) August 2, 2024
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2024-08-02 09:44