Bitcoin Options Expiry Indicates Declining Price Volatility in The Crypto Market

Bitcoin faces stiff resistance at the $61,300 threshold, with its price struggling below $60,000 in the past 24 hours.

Despite the cooling inflation data, futures market metrics reflect a bearish investor sentiment for Bitcoin and Ethereum. However, the bulls are putting up a tough fight, vying to reclaim market control.

Notably, the Bitcoin options expiry on August 16 is a focal point for investors and traders looking for the next trend.

Bitcoin and Ethereum Options Set to Expire Amid Price Retracement

According to Deribit data, 24,000 Bitcoin options with a put call ratio of 0.83 will expire on Friday, August 16. These Bitcoin options have a total contract value (notional value) of 41.4 billion and a maximum pain point of $59,500.

Tomorrow approximately $1.88 billion in crypto #options are set to expire

BTC Options
Not. Value: $1.4 B
Put/Call Ratio: 0.83
Max Pain: $60,000

ETH Options
Not. Value: $0.48 B
Put/Call Ratio: 0.83
Max Pain: $2,650

Weekly Expiry: 8:00 AM UTC, 16 August pic.twitter.com/cY3XMNYFur

- Deribit (@DeribitExchange) August 15, 2024

Bitcoin's put call ratio of 0.83 confirms that buyers and sellers are struggling for control. BTC trades at $58,453, with a 3% 24-hour decline, and technical indicators suggest prices could further drop to $54,000.

The current options expiry makes up 10% of the total open positions available, while August, September, and December options expiry make up slightly over 20%.

In addition, the options term distribution is relatively stable, showing significant resilience as the market navigates the bearish tides. This also hints at a possible reduction of market volatility to enter a more stable phase.

In addition to the Bitcoin options, 184,000 ETH options will expire on August 16 with a put-call ratio of 0.80. These Ether options have a maximum pain point of $2,650 and a notional value of $470 million.

Ether and most altcoinshave struggled in price over the past 24 hours, mirroring Bitcoin's struggles as sellers mount pressure on BTC. Ethereum's price at 8:39 a.m. EST is$2,574, down 3.4%in the past 24 hours.

Despite the relaxed US inflation, Bitcoin faces strong rejection at the $61,300 price level, preventing a potential rally to $61,000. BTC's price struggles continue as the US tech stocks gain massively; hence, there is no correlation.

Analytical platform 10x Research reveals that Bitcoin could retreat and trade in the $50,000-$60,000 range. If BTC retreats, it will trade at lower lows, leading to long liquidations close to $50,000.

BTC's Price Movement Shows Volatility

Meanwhile, Bitcoin rebounded from a low of $56,150 on August 15 to trade above $58,000 on August 16. These price moves caused significant liquidation of long and short trading positions, reaching $75 million, according to data from CoinGlass.

Consequently, popular trader Daan Crypto Trades referred to Bitcoin's price movement as a sweeping masterclass." Bitcoin's price moved past critical highs and lows on the daily chart in a sweeping motion, resulting in liquidations.

Meanwhile, analyst Keith Alan noted that a fourth death cross formed on BTC's daily chart on August 15. Alan predicted a re-test of BTC's support levels around $49,500 before the bulls begin the next rally.

However, if the bears push Bitcoin below the trendline, there will be an extended downtrend before a recovery.

On August 14, Alan noted that Bitcoin had experienced three different death crosses in just nine days. These death crosses came in quick succession following a 30% price drop due to rejection at $69,000.

Alan noted that while death crosses signal downtrends, they do not result in sustained bearish markets. Rather, a death cross sometimes marks the end of a retracement and the beginning of a positive uptrend.

We now have a 4th Death Cross on the Bitcoin Daily chart.

Which scenario do you think is more likely?

1. This leads to a test of support. Potentially, a double bottom at $49.5k validates support and bulls start the next leg up.

2. BTC gets flushed to the trend line which... https://t.co/3dwen6dCDh pic.twitter.com/4dprFHEbv4

- Keith Alan (@KAProductions) August 15, 2024

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