Well, it looks like we may have spoken too soon when it comes to bitcoin. We were all so sure that the $11,000 price it just reached roughly 48 hours ago would stick around this time, but it looks like that’s not the case. Volatility is coming back, and we’re witnessing it today as bitcoin has dropped roughly $600 to $10,400 at press time.
Bitcoin Drops into the Low $10K Range
This is a rough time for bitcoin considering how up and down it’s been over the past several weeks. The currency has struggled to make any sort of mark in the crypto space and remains in a wavering position that makes many traders and enthusiasts struggle to understand what it’s trying to do or accomplish.
And according to analysts everywhere, the volatility is not over. Bitcoin could experience a whole new wave of it into next week given that nearly $2 billion in bitcoin options are on the verge of expiring. Typically, when options or futures contracts are about to hit their final positions, bitcoin’s price tends to meander about quite a bit.
The good news is that open interest has reached a new high. It’s at roughly $1.9 billion, which is about three times where it was during the summer. The data is coming from Skew, which also states that nearly 50 percent of all contracts are set to expire at the end of this week.
The circumstances could lead bitcoin to enter an entirely new bullish phase, and we could see bitcoin rushing to the top of the financial ladder once again. How high it will go is open to anybody’s guess, but we’re likely to witness bitcoin hit the stars once again in the coming days.
Alex Kuptsikevich – a senior financial analyst at FX Pro – stated in a recent interview:
Bitcoin has resisted the bears’ pressure below $10,000, saving itself from falling further towards $9,000 and below… It is worth paying attention to the reduced volatility in bitcoin in recent days, along with cautious price growth. This is core akin to careful buying following the optimism of global markets, rather than going all in on the prevailing optimism.
Options Are Expiring
2020 has seen the bitcoin options space expand to unprecedented heights. Deribit is one of the biggest – if not the biggest – derivatives exchange, boasting most of the contracts out there for bitcoin contracts. The exchange is based in Panama, suggesting that Latin America is a growing haven for crypto traders and enthusiasts everywhere.
BTC has managed to sustain a certain level of stability given that it has yet to fall below the $10K line. Sadly, the same cannot be said for other asset classes, as stocks have ultimately fallen into oblivion over the past few days. At the time of writing, the Dow Jones has dropped roughly 800 points.