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As Bitcoin options worth $1.4 billion near expiration, selling pressure threatens to push the cryptocurrency's price below the critical $56,000 support level, potentially triggering heightened market volatility.
Options Expiry Could Trigger Significant Sell Pressure
Another important support level might be breached by Bitcoin's price due to the impending crypto options expiration, which is expected to add substantial selling pressure.
According to Deribit, more than $1.4 billion worth of Bitcoin options are scheduled to expire on August 16 at 8:00 am UTC. With this, the "max pain point" for Bitcoin is defined as $60,000, the threshold at which the majority of options contracts would become entirely worthless.
At 8:35 am, however, Bitcoin was trading at $58,101, a decrease of more than 3.6% over the previous 24 hours, according to data compiled by Cointelegraph.
Unless Bitcoin can pull itself together and rise beyond $60,000, the $1.4 billion worth of options will expire, bringing with them further downward volatility. There is often higher price volatility in the cryptocurrency market in the periods leading up to options expiration.
Bitcoin ETFs Experience Positive Inflows Before Turning Negative
According to data from Farside Investors, US spot Bitcoin exchange-traded funds (ETFs) had two days of positive inflows before turning negative again on Aug. 14, with net outflows reaching $81 million.
Nevertheless, Bitfinex researchers informed Cointelegraph that the positive Consumer Price Index (CPI) result could spur additional investments into Bitcoin ETFs:
“The favorable CPI data is expected to catalyze further inflows. Investors are likely positioning themselves to benefit from the expected rate cut and the potential for a broader market rally. As a result, we might observe continued and possibly accelerated inflows into these ETFs, reflecting a shift in sentiment toward risk-on assets.”
Annualized price increases for consumers were 2.9% in July, according to statistics released by the US Bureau of Labor Statistics (BLS) on Aug. 14. This is the slowest rate of growth since 2021.
The price of a cryptocurrency can rise substantially due to the infusion of funds into exchange-traded funds. By February 15th, when Bitcoin's value had topped $50,000, exchange-traded funds (ETFs) had absorbed about 75% of the additional capital pouring into the cryptocurrency.
Before gathering more upward momentum, Bitcoin could go below $56,000.
Whales and Traders Eye $56K as Key Support Leve
Trade Confident, a crypto research site, stated in an August 14 X post that, given the market mood surrounding Bitcoin whales or massive holdings, BTC is likely headed for the $56,000 support:
Anonymous Bitcoin trader Crypto Pump Analytics suggested in a post from August 15th on X that the $56,000 mark would be a demand zone:
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