Bitcoin is prepped for a $ 6 billion earthquake as a crypto price crash hits Ethereum, BNB, Solana, Cardano and XRP
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Bitcoin and cryptocurrency prices have fallen this week, draining over $ 200 billion worth of the combined crypto market – despite some bold bitcoin price predictions.
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Bitcoin price has fallen around 6% since Monday, falling from around $ 52,000 per bitcoin to below $ 46,000 before recovering slightly. Meanwhile, other major cryptocurrencies like Ethereum, Binance’s BNB, Solana, Cardano, and XRP have also declined, with XRP losing nearly 20% of its value in the past week.
Now, Bitcoin traders are prepared for more than $ 6 billion worth of options contracts to expire on New Years Eve – one of the biggest option defaults this year that could fuel price volatility.
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The bitcoin and cryptocurrency market has fluctuated a lot with the bitcoin over the past six months … [+]
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It is believed that the expiration of large Bitcoin options could trigger a bout of price volatility, with previous large expirations attracting investor attention and analysts citing the expiration as a cause for concern among already nervous investors who might choose to be either risky Double bets or withdraw their positions.
Bitcoin price is currently just over 30% below its all-time high in November. While Ethereum, the second largest cryptocurrency after Bitcoin, fared less badly, down 20% from its peak, other smaller cryptocurrencies like Binance’s BNB, Solana, Cardano and XRP saw bigger declines.
“While the total trading volume of Bitcoin was constant, the 31st Senior Sales Trader at the British digital asset broker GlobalBlock, wrote in a note this week.
Around 130,000 bitcoin option contracts – bets on the future bitcoin price that will allow traders to buy or sell the cryptocurrency at a certain price within a set period of time – run on Friday, according to Skew data, which was first reported by Coindesk out.
It is believed that in the run-up to an option expiration, Bitcoin tends to move in the direction of what is known as the maximum pain point, followed by a solid directional move in the days after settlement, as traders push the spot price closer to the exercise price, which is the highest number open options contracts expire worthless – resulting in maximum losses (maximum pain) for option buyers. The maximum pain point for the New Year’s Eve options expiration is $ 48,000, according to data Coindesk first reported from Cayman Islands-based crypto financial services firm Blofin.
Meanwhile, other market watchers, nervously watching Bitcoin, Ethereum, Binance’s BNB, Solana, Cardano and XRP prices drop, have pointed to several crypto exchanges that banned users from China on Friday following the country’s recent raid.
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More than 120,000 Bitcoin option contracts valued at over $ 6 billion will expire on New Years … [+]
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“Bitcoin’s recent downturn came as the year draws to a close and several crypto exchanges prepare to ban users from China,” said Joe DiPasquale, CEO of Bitcoin and crypto hedge fund BitBull Capital, in E. -Mail comments.
“Selling pressure has increased prior to this ban as users from China attempt to sell cryptocurrencies and convert them to fiat before the December 31st deadline. We can expect some relief in the New Year and a possible recovery phase. Recovery will depend on market sentiment and underlying momentum at this point in time. “
In September, one of the largest bitcoin and crypto exchanges in China, Huobi, said it was working on a Dec.
News of China’s latest crypto crackdown weakened the bitcoin and crypto market in the spring, with the ban adding to China-based crypto miners – who use powerful computers to secure blockchain networks in exchange for freshly minted coins forces to scatter all over the world.
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