bitcoin Options Expirations Add Volatility Amid Bearish Sentiment
bitcoin (BTC) has extended its decline, now trading near $53,081, as shown on the 4-hour chart. The global crypto market cap stands at $1.95 trillion, reflecting a 24-hour drop of over 2.5%.
Investors are anxiously awaiting the upcoming US Non-Farm Payroll (NFP) report, which could influence the Federal Reserve’s stance on potential interest rate cuts.
On Friday, September 6, approximately 13,500 bitcoin options contracts, with a total notional value of around $776 million, are set to expire. bitcoin options expirations often lead to heightened volatility. If traders adjust their positions, it could trigger a price recovery.
However, if bearish sentiment persists, the decline could deepen. This expiry presents a pivotal moment for bitcoin, as market sentiment remains divided, adding to the current uncertainty surrounding BTC’s near-term outlook.
On Friday, September 6, approximately 13,500 bitcoin options contracts, worth around $776 million, are set to expire. While this expiry is smaller than the previous end-of-month event, its immediate effect on bitcoin’s price is expected to be minimal.
The current put/call ratio stands at 0.82, signalling a slight preference for call options, yet overall market sentiment remains bearish. bitcoin is trading around $53,081, well below $56,000, and the Fear and Greed Index shows “extreme fear.”
Market Sentiment and Technical Analysis
bitcoin briefly fell to $53,000 before a modest recovery. Market sentiment, driven by former BitMEX CEO Arthur Hayes’ prediction, suggests a potential drop below $50,000. As the broader cryptocurrency market struggles, bitcoin remains under pressure.
Despite the high open interest, the impact of the option’s expiry may be limited, with prices likely to remain subdued. The pivot point stands at $54,350, and a failure to break above this level could signal further declines. Immediate support lies at $52,603, with the next support levels at $51,286 and $49,778.
The RSI is currently at 36, indicating oversold conditions, while the 50-day EMA at $57,585 serves as resistance, reinforcing the bearish bias. A breakout below $52,603 may intensify selling pressure, driving the price further down. Conversely, a push above $54,350 may open the door for a potential short-term recovery.
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Overall, as bitcoin experiences volatility ahead of the options expiry, market participants are closely monitoring the price movements. With the potential for increased volatility due to the options expiry, bitcoin’s near-term outlook remains uncertain. However, the broader cryptocurrency market continues to adapt to evolving market conditions, offering new opportunities for investors.
Disclaimer: crypto is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
