Bearish pressure on Bitcoin is increasing as Friday's option expiration approaches. The bears could cause the price to settle below $27,000 allowing options market speculators betting on declines to cash in on record profits. Bitcoin has been pushed below $30,000 several times in April and today the cryptocurrencies are recording another weak day:
- In addition to the uncertainty surrounding the BTC network's technical problems (soaring fees and tens of thousands of outstanding transactions), sentiment also weakened after still unconfirmed reports of a BTC sale by the US, which holds significant reserves of seized BTC from SilkRoad;
- Investors are assessing the impact of a potential economic slowdown and Fed policy on cryptocurrencies. Today's US claims reading came higher than expected, showing a weakening U.S. labor market. Potential recession could worsen sentiments, also in crypto market;
- The call to put ratio (the ratio between call and put options) at 1.65 shows a lack of balance between bulls and bears. There is $560 million in call options and $340 million in put options. Bullish options have been by far the more popular in recent weeks, but in the end it is the supply side that gets the upper hand
- It is now in the sellers' interest to get the lowest possible price before the options expire tomorrow. A drop below $27,000 could bring the bears as much as $230 million in profits, if the bulls manage to maintain the current level sellers will earn about $120 million according to Coinglass estimates.
'Open interest' in the BTC options market. Source: Coinglass
Bitcoin chart, H1 interval. The price has fallen below the SMA100, SMA200 and the 23.6 Fibonacci retracement of the March 10 upward wave, making it likely that demand will only be more active at the 38.2 Fibo level, near $26,650. Source: xStation5
