Bitcoin has taken a dive along with all the altcoins ahead of the $6 Billion Options Contract Expiry that is due on Friday. Bitcoin is trading around $47,900 on Wednesday after a weeklong low volume rally.
Bitcoin has taken a nosedive ahead of the $6 Billion Options Contract Expiry due on Friday. The crypto market has shown a low volume rally during the Christmas week and Bitcoin crossed $51K to test the higher resistances. As soon as the Christmas week was over, Bitcoin started to fall taking along with it the altcoins. Ethereum at the time of writing has been trading at $3,800 whereas Bitcoin at $47,900.
According to the experts a total of 129,800 option contracts are set to expire this Friday that are worth $6 Billion. The historical data reveals that the price of the Bitcoin tends to move towards the ‘max pain’ point nearing the options expiry event and days after the settlement a strong directional move is encountered. This movement of price towards ‘max pain’ point is due to sport market manipulation by the option sellers as they push the price closer to the strike price at which maximum number of option contracts will expire worthless resulting maximum losses for options buyers thus known as ‘max pain’ points.
The direction of the price movement after the settlement is still unknown, but many experts believe 2022 to be an eventful year for the crypto industry. On the fear and greed index the needle has shifted towards the fear side from yesterday’s value of 41 to value of 27 today depicting an increased fear in the sentiments of the investors.
Disclaimer: The article is meant for the educational purpose only and in no way it should be considered as financial advice. Own research on the topic is advisable.
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