Bitcoin‘s (BTC) price broke the important support level of $27,000 at the beginning of this week and is currently trading around $26,700. This situation has led investors to focus on Bitcoin options, which will expire today and may cause an increase in volatility.
Bitcoin Options: What Do They Say?
The expiration date of approximately 24,000 BTC Bitcoin options is approaching, and when we look at the details of these options, we see that the trading ratio is 1.23, the maximum pain point is $27,000, and the nominal value is $640 million. The price of Bitcoin is currently below the maximum pain point. In addition, the expiration date of approximately 190,000 ETH Ethereum options with a trading ratio of 0.71, a maximum pain point of $1,600, and a nominal value of $290 million will also expire today.
BTC continues to be the dominant player in weekly positions for Bitcoin options with a significant increase of 70%. Surprisingly, Bitcoin short positions have a 60% ratio.
Despite the high volatility, implied volatility (IV) data on various main maturities, which are at an all-time low, do not indicate a recovery in the near future. Moreover, the recent decrease in market liquidity indicates an imminent market movement.
The increase in the volume of Bitcoin futures and options contracts means that it could cause changes in Bitcoin’s calm performance in October. In addition, the open interest in Bitcoin, which indicates an increase in greed among investors, usually signifies an important turning point. Currently, this figure is at $6.19 billion.
Current Outlook on Bitcoin’s Price
While Bitcoin continues to move between $25,000 and $32,000, it struggles to surpass the 200-day simple moving average. The largest cryptocurrency is testing the 50-day simple moving average, which is currently around $26,500, corresponding to an important level. This level limits further selling potential by providing support up to $25,000. For Bitcoin to surpass the $32,000 resistance, it needs to convincingly exceed the 200-day simple moving average, which is around $28,000.
Some market analysts believe that the price of Bitcoin will drop to $20,000 before the next bull run, which is expected to start before or after the Bitcoin block reward halving in April 2024. However, developments and progress surrounding the spot Bitcoin ETF are keeping this price drop under control.
