Bitcoin, Ethereum to Fall After Options Contracts’ Expiry

Bitcoin just fell below the $55,000 support level, and with the upcoming expiry of Bitcoin and Ethereum’s Options contracts, they are expected to fall further.

With Bitcoin plunging to $53,400, levels last seen in February, the cryptocurrency market is in full flame. Over 13% of its global market capitalization has been lost due to this broader decrease during the last 48 hours, amounting to over $250 billion. On the other hand, an already precarious situation may be further strained by the approaching expiration of Ethereum and Bitcoin options contracts.

Recently, Bitcoin fell below the crucial $55,000 support level. It may drop even lower to the $52,000 support level if it doesn’t rise.

As this happens, the market is preparing for over 18,300 BTC options on Deribit to expire, with a total notional value of $1 billion. The max pain point at which option holders incur the most excellent possible financial loss has decreased from $63,500 to $61,500. The put-call ratio is currently 0.65. The put-call ratio is a noteworthy indicator of market sentiment; a ratio less than one implies that there are more call options—bets on price increases—than put options—bets on price declines.

According to recent data, there was a 19,552 put volume over 24 hours, while there was a 22,088 call volume. As a result, the put-call ratio increased to 0.88 over the previous day.

Ethereum is likewise under a lot of selling pressure at the moment. The price of the cryptocurrency is in the $2,830 range. In addition, 163,170 Ethereum options with a $472 million value are about to expire. The maximum pain price for ETH options is $3,350, and the put-call ratio is 0.35. With a 24-hour increase in the put volume of 98,643 and a call volume of 126,788, the put-call ratio for ETH is now 0.78.

According to CoinGlass data, the continuous market panic has caused the cryptocurrency market to liquidate more than $637 million worth of assets. $540 million are long holdings, and $97 million are short positions. Notable altcoins like NOT, SOL, DOGE, BNB, XRP, PEPE, and PEOPLE have also experienced notable liquidations.

What Comes Next?

The once-dominant exchange Mt. Gox is said to have caused this drop by returning $10 billion in Bitcoin and Bitcoin Cash. Arkham claims that Mt. Gox moved 47,229 Bitcoin today, worth about $2.97 billion.

The on-chain data observed by renowned financial expert Jacob King indicates a significant selling volume from these wallets. He believes that the bulk of the $8.2 billion in Bitcoin that will be returned to creditors will be liquidated. Jacob alerted his followers to impending bear market conditions. He said, “I know this is controversial, but this will easily send BTC back into a harsh bear market based on the current low demand volume.”