Bitcoin traders and investors are nervously watching traditional markets which have fallen this week.
The price of bitcoin, after climbing more than 20% in the past 30 days thanks to a series of positive developments, has started to falter, sending red flags to bitcoin traders – some of whom were already anticipating a correction.
Now Bitcoin traders have turned to 60,000 Bitcoin options that will expire on Friday, October 30, which could potentially send a shock of $ 750 million to the increasingly volatile bitcoin market.
The Bitcoin options market, which sees traders betting on what they expect from the price of bitcoin going forward, has exploded this year, adding a staggering $ 1 billion last month alone and is now valued at just over $ 2.5 billion, according to data from crypto and market research firm Skew.
The impending expiration of the $ 750 million Bitcoin options could lead to wild swings in Bitcoin prices. When the options expire, the trader who made the bet will either receive a payout or lose their stake. The Bitcoin options market swelled through 2020, supported by an influx of institutional investors and backed by Deribit, a Panama-based derivatives exchange, which now accounts for nearly $ 2 billion in Bitcoin options contracts.
Meanwhile, the price of bitcoin has jumped this month, rising $ 14,000 per bitcoin and pushed higher by a series of bullish news on bitcoin and a growing belief among some investors that bitcoin will serve as a hedge against a wave. inflation they see on the horizon.
The price of bitcoin has given up on some of its gains in the last 24-hour trading period, however, falling with global stock markets balking at the surge in coronavirus cases around the world.
“Some technical momentum indicators are still signaling the price of bitcoin as being somewhat overbought,” said Simon Peters, bitcoin and crypto analyst at brokerage firm eToro. “I wouldn’t be surprised to see a pullback, I hope to stay above $ 13,000. If bitcoin drops below the $ 12,000 resistance level we saw previously, I’d be happy to see it. hold as a support. “