Bitcoin price trades below $48,000 as $6 billion options contracts expire

Bitcoin price trades below $48,000 as $6 billion options contracts expire

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Answer Bitcoin price trades below $48,000 as $6 billion options contracts expire

The price of Bitcoin fell to less than 48 thousand dollars during the last hours of the day yesterday, Tuesday, 28 December and is still continuing until today, as it is currently trading at 47,700 dollars with a decline of nearly 3% during the past 24 hours.

The major cryptocurrency managed to break through the crucial resistance at $51,000 earlier this week, but was unable to hold onto its gains.

Some analysts attribute the current market decline to the expiration of 129.8K options contracts next Friday.

According to the published data and figures, the total value of the options contracts set to expire is worth $6 billion.

Read:Bank of America: Cryptocurrencies Could Overtake Stocks Amid Possible Recession!

It is a common event in the crypto market, where the price fluctuates and shows higher volatility in the period leading up to the expiration date.

This price movement is usually caused by option sellers (mainly institutional traders) manipulating the spot market to push the price closer to the price at which the largest number of open options contracts expire.

For option buyers, this results in maximum losses or maximum pain.

According to Cayman Islands-based crypto and financial services firm Blofin, the maximum pain point for Friday option expiration is $48,000.

Could bitcoin price see a reversal after options contracts expire?

Bitcoin price is currently moving in the second support area below $51,000, i.e. between $46,000 and $48,000, and the market remains optimistic about a recovery even though the last quarter was bearish except for the month of October.

Despite the current drop in prices, market sentiment remains bullish towards the end of the year.

Read:Ripple CEO: The current collapse and downturn in the crypto market will pass too!

Crypto analysts have compared the uptrend of 2021 with 2017, and believe that Bitcoin will touch new highs in 2022 and we are far from the top of the market at the moment.

The price of the cryptocurrency market often turns green in the wake of the options expiration, and with the options expiration approaching, fluctuations in the price of Bitcoin were expected.

Read also:

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