This week, Bitcoin fell again, dropping below $109,000, its lowest position in more than three weeks. The dip cost traders who had wagered the price would go up almost $275 million. This Friday’s huge $22 billion options expiration is now the focus of everyone’s attention. It may either cause Bitcoin’s price to rise or put further pressure on it.
Why Did BTC Drop?
Many traders have been taking precautions ahead of Friday. On Binance, experienced traders cut down on their “long” (bullish) bets (those are transactions that benefit if Bitcoin goes up). This reduced the long-to-short ratio to 1.7x, its lowest level in a month.
As Bitcoin went below $112,000, these traders started to reverse course, increasing upward exposure as the signal gradually returned to 1.9x in favor of longs.
Meanwhile, at OKX, whales (the players) were more aggressive. They had established long bets anticipating the price to continue over $112K. But when Bitcoin plummeted to $108,700, they were obliged to decrease their investments at a loss.
What $22B Options Expiry Means
Every month, a huge number of Bitcoin options (contracts that enable traders to purchase or sell at a specified price) expire. This month’s expiration is worth nearly $22 billion.
If Bitcoin can’t bounce back over $110,000 by the deadline, speculators holding bearish bets (called “puts”) might finish up with a $1 billion edge. That’s why the $110K level is such a vital battlefield right now.
Some positive Signs
Bitcoin exchange-traded funds (ETFs) witnessed $241 million in fresh inflows on Wednesday, which suggests some investors are still optimistic. Bitcoin futures, another key market indicator, remain robust despite a minor decline this week.
At the same time, Tether (USDT), the biggest stablecoin, is trading at a tiny premium in China. That generally signifies that new money is entering the crypto market, which might bolster prices following the expiration.
Beyond the crypto sphere, worldwide news is playing a role too. Traders are anxious about the U.S. economy, with fears over employment data and even a possible government shutdown in October. riskier assets like Bitcoin.
The short-term trip seems rough. If Bitcoin manages to climb back over $110K following Friday’s expiration, we might witness a resurgence. If not, a decline closer to $100K can’t be ruled out.
At CryptoTrend, we consider this decline as part of Bitcoin’s typical cycle of ups and downs. Big expiries typically shock the market, but history indicates Bitcoin has a way of coming back. For novice investors or casual readers, it would be a moment to monitor attentively rather than rush into investments.
his article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.
Source: Cointelegraph
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