Cryptocurrency Bitcoin Faces Critical Moment with $4.9 Trillion Worth of Options Approaching Expiration - Find out Why
The crypto market is gearing up for a potentially volatile period, as a significant amount of stock and ETF Options worth $4.9 trillion are set to expire on September 20th. This event, often accompanied by market turbulence, has the potential to shake up the crypto market, according to various analysts.
The expiry of these Options could have a particularly impactful effect on Bitcoin, which is currently sitting in a tight zone between two major liquidation clusters at $120K and $114K. Short positions could be wiped out at $120K, while $114K threatens long traders with heavy losses, as reported by Alphractal.
This critical juncture in the Bitcoin market is further complicated by the build-up of excessive leverage, a situation that analyst TedPillows warns could lead to a "flush" being almost inevitable. This leverage is stacked on both sides of the market, adding to the anticipation of the next move.
The chart patterns suggest that Bitcoin has a history of dipping before recovering. This repeating cycle was observed earlier this year, when Bitcoin consolidated before slipping below $100K after an Options expiry in June. Similarly, a sharp drop occurred in March 2021 due to a similar setup.
While Bitcoin has held its ground, most altcoins have been lagging for two months straight. Only 11 out of 55 top altcoins have managed to outperform Bitcoin in the past 60 days, according to Alphractal. The hype around altcoins is primarily concentrated in newer launches or Binance Smart Chain projects, with only a few exceptions.
The dominance of Bitcoin has steadily grown, pushing altcoins into what is being referred to as "Bitcoin season." This dominance is further emphasised by the presence of major institutional holders behind large Bitcoin and ETF option positions. Entities like Strategy Inc (headed by Michael Saylor, holding over 636,500 BTC), BitMine Immersion Technologies (holding over 2 million ETH), and prominent institutional investors such as ARK's Cathie Wood, Pantera, Kraken, DCG, and Galaxy Digital supporting BitMine; these groups represent significant coordinated holdings in the crypto ecosystem.
Traders are prepared for the volatility that the Options expiry might bring. The next move in the Bitcoin market could wipe out one side and pave the way for an all-time high. It remains to be seen how the market will react to this critical event.
