Bitcoin, world’s largest cryptocurrency’s investors are expecting a significant downward move after it failed to hit an all-time peak of $100,000. This market sentiment was as per crypto trading platform citing recent options expiry activity for Bitcoin. Bitcoin faced selling pressure, dipping to an intraday low of $92,600 before recovering to $94,600 on Tuesday. Its market dominance dropped to 57.38% as long-position liquidations exacerbated the downward trend.
Bitcoin hit a record high of $99,830 on November 22, but it has since fallen more than 8% to a one-week low of 91,377.32 on Tuesday. Bitcoin, the most popular cryptocurrency has soared 120% so far this year and about 34% this month with the election of Donald Trump as U.S. president. After Trump embraced digital assets during his campaign, promising to make the U.S. the “crypto capital of the planet,” and accumulate a national stockpile of bitcoin.
Bitcoin options expiry
As per Nick Forster, founder of onchain options decentralized protocol Derive, the so-called call-put skew index for the upcoming December 27 bitcoin option expiry showed a significant 30% drop in the last 24 hours. This shows options market sentiment, as market participants shifted toward more protective strategies.
The call-put skew, which reflects market sentiment, refers to the difference in implied volatility between calls (options to buy) and puts (options to sell). This skew still shows a preponderance of calls over puts, although it has since declined.
Bitcoin liquidations for profit
The reason for Bitcoin falling sharply, per Forster is “It suggests traders are hedging against potential downside risks.” He added, “however, pullbacks like these are not uncommon in bull markets.”
Investors are looking to December 27, when $11.8 billion in bitcoin options expire that could trigger major moves in either direction.
Bitcoin options expiry impact
According to Foster, there is a 68% chance of bitcoin moving 16.03% lower to $81,493 or 19.9% higher to $115,579 by December 27. There is, however, a smaller probability of about 5% of bitcoin making bigger moves with a 29.49% fall to $68,429 or a 41.83% surge to $137,645 by the same date.
Derive data also showed higher odds of 45% of bitcoin hitting $100,000, from last week’s 34%, with a new 4% probability of surpassing $150,000.
Forster also noted stability in bitcoin’s volatility in the last seven days, with the seven-day at the money implied volatility at 63% and the 30-day level at 55%.
“This close alignment suggests the market anticipates significant movements soon.”
Bitcoin options trade retreat for profit-making
Bitcoin has come off its high perch for now, and one of reasons cited by market participants for the decline was good old profit-taking.
Anthony Pompliano, founder and chief executive officer at Professional Capital Management note that long-term holders have distributed $60 billion worth of supply in the last 30-days.
Of long-term holders’ supply moved since the bitcoin’s bottom of $15,479 hit during the FTX collapse two years ago, 21% of it has happened in November, which is the “heaviest profit-taking we have seen so far this cycle,” according to a post of _checkonchain.com on X.
Cryptocurrency update
As of 12:19 p.m. on Tuesday, Bitcoin traded 3.5% lower at $94,785, while Ethereum, the second-largest cryptocurrency, rose 1.5% to $3,431. Other major cryptocurrencies also saw declines, including Solana (-5.6%), BNB (-2.7%), XRP (-2.3%), Dogecoin (-5%), Cardano (-6.5%), Tron (-4%), and Shiba Inu(-2.5%). Among the top crypto tokens, XRP surged the most, jumping 24% in the last 24 hours.
