- Mt. Gox beginning payouts and the German government selling Bitcoin may have contributed to the crash.
- Bitcoin Fear & Greed Index fell to 29 from yesterday’s 44, signaling more fear and uncertainty in the markets.
- The current BTC maximum pain point is $57,000, while ETH’s is $3,350.
Bitcoin price dropped below $55,000, trading at $54,516 with a 24-hour decline of 7.4%, while ETH fell below $3,000, reaching around $2,800. This decline happens against the backdrop of a huge number of Bitcoin (BTC) and Ethereum (ETH) options expiring today. This expiration marks the end of H1 2024 and is historically the second largest in financial markets.
Bitcoin Price Analysis: Further Downside Expected Over the Weekend
BTC’s price broke below a key support level amid a broader double-top market structure. Further below a region of market imbalance may be pulling the price lower, further exacerbating the Bitcoin sell-off.
The BTC price action is trending below the 50-day and 200-day simple moving averages (SMA), which is bearish for the asset. Furthermore, the 14-day relative strength index (RSI) is in the oversold regions. More bearish momentum is expected going into the weekend and next week.
The expiring contracts represent $1.04 billion in BTC and $501.1 million in ETH. BTC’s put/call ratio is 0.71, indicating a previously bullish sentiment while ETH’s put/call ratio is 0.73, also suggesting prior optimism.
The current BTC maximum pain point is $57,000, while ETH’s is $3,350. Short-term implied volatility for BTC has increased by 10% as recent market indicators suggest a shift towards bearish sentiment.
Some of the factors contributing to the downturn include the Mt.GOX exchange beginning payouts and the German government selling its crypto assets.
While options expiration can cause short-term price volatility, its effects typically normalize within a day. Traders remain cautious of potential price fluctuations during this period, as increased volatility may impact trading strategies and trigger stop-loss orders.
The Bitcoin Fear & Greed Index fell to 29 from yesterday’s 44, signaling more fear and uncertainty in the markets. Social data from Santiment shows the markets haven’t been this fearful in Bitcoin’s history.
The market’s reaction to options expiration, combined with current news events, will likely shape short-term price movements for both BTC and ETH. However, macro trends are generally determined by broader market factors beyond options expiration events.
