As a seasoned crypto investor with battle-hardened nerves and a portfolio that has weathered numerous market storms, I find myself standing at yet another crossroads in this rollercoaster ride we call cryptocurrency trading. The Bitcoin options expiry on August 16th is looming large, hinting at a potential easing of crypto market volatility. However, the current resistance at $61,300 levels and the bearish technical indicators are causing me to tread cautiously.
As someone who has closely followed the cryptocurrency market for several years now, I have seen numerous instances where Bitcoin price experienced significant fluctuations due to various factors such as regulatory decisions, market sentiment, and large-scale buying or selling activities. This week, we saw another example of this when the price faced strong resistance at $61,300 levels and subsequently plummeted under $57,000 on Thursday before partially recovering.
Bitcoin Options Expiry and Easing Market Volatility
On this coming Friday, August 16th, approximately 24,000 Bitcoin options will expire. These options have a put-call ratio of 0.83, indicating that there are slightly more ‘put’ (bearish) contracts than ‘call’ (bullish) ones. The total notional value is around $41.4 billion. The ‘max pain point’, the price level at which the most losses will be incurred by option holders, stands at $59,500. As the ratio approaches 1, it suggests that both bulls and bears are engaged in a fierce struggle. Currently, Bitcoin’s market price is down by 5%, trading at $58,077. Technical indicators are pointing towards a possible drop in BTC price to around $54,000.
As an analyst, I find it noteworthy that the current option expiry comprises merely 10% of the total active positions within the market right now. The upcoming options for August, September, and December account for approximately 20% each, maintaining a relatively balanced term distribution with notable robustness. This pattern suggests a certain level of resilience in the options market, implying that the crypto market may be experiencing reduced volatility in the foreseeable future. This could potentially indicate a transition towards a more stable phase for the market.
184,000 Ethereum (ETH) options are due to expire today, with a put-call ratio of 0.80, representing a combined value of approximately $470 million. The maximum potential loss point for these options is $2,650. Currently, the price of Ethereum is undergoing selling pressure, down 3.47%, and trading at $2,587.96. This gives it a market capitalization of around $311 billion.
Macros Taiwinds Block the Bitcoin Rally
1. In spite of a drop in CPI inflation figures, Bitcoin enthusiasts haven’t managed to rebuild momentum during the present market turbulence, as they’ve been met with stiff resistance at the $61,300 price point. According to 10x Research, powerful economic factors have hindered Bitcoin from reaching $66,000, leaving traders baffled by the disconnection between US tech stocks and the weaker crypto market performance.
10x Research’s report predicts that Bitcoin may fall into the price range of $50,000 to $60,000. If it does, there’s a strong resistance level between $60,000 and $61,000. This potential pause might let oversold technical indicators recover, increasing the possibility that Bitcoin could test its August 5 low of around $50,000 again. This drop might take some investors off guard.
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2024-08-16 08:18