Bitcoin Faces Market Turmoil as Major Options Expire Amid Mounting Panic

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As Bitcoin’s price falls below $54,000, the crypto market faces an escalating downturn.
Today, over 18,300 Bitcoin options will expire on Deribit, adding pressure to the market.
On-chain data suggests the panic selling may just be beginning, following $700 million in crypto liquidations.

Why Bitcoin and Ethereum Options Expiry Today Might Accelerate the Crypto Market Collapse

Bitcoin Price Drop Sparks Market Concerns

The leading cryptocurrency, Bitcoin, recently dropped below the critical $54,000 support level, triggering widespread unease across the crypto market. Investors are particularly apprehensive about the expiration of significant Bitcoin options, amounting to a nominal value of $1 billion. With a put-call ratio of 0.65, market sentiment is leaning towards bearishness, exacerbating concerns of continued price depreciation. Technical indicators suggest that if Bitcoin fails to recover above $55,000, it could potentially fall to the $52,000 support zone, further deepening the market crisis.

Ethereum in Spotlight Amid Option Expiry

In parallel, Ethereum is also under scrutiny as 163,170 ETH options, equivalent to $472 million, are set to expire. The prevailing put-call ratio of 0.35 and a maximum pain price of $3,350 indicate that Ethereum’s price decline below $2,890 is particularly troublesome for traders. Over the last 24 hours, the put volume has surged to 98,643 while the call volume remains higher at 126,788, leading to a put-call ratio of 0.78. The heightened volatility reflects increasing bearish sentiment, suggesting that traders are bracing for further losses.

Massive Liquidations and Market Sentiment

According to data from Coinglass, the crypto market has seen over $700 million in liquidations in a single day. This wave of liquidations has affected more than 235,000 traders, with the largest single liquidation order amounting to $18.48 million on Binance. Notably, the last 24 hours have witnessed liquidations exceeding $600 million in long positions and $100 million in short positions, signifying a market-wide bloodbath. Major altcoins like PEPE, PEOPLE, ORDI, WLD, LTC, FIL, ADA, BCH, among others, have also experienced significant liquidations.

Regulatory Moves and Investor Anxiety

Another contributing factor to the market turmoil is the announcement by the now-liquidated crypto exchange Mt. Gox, which has begun repayments totaling $10 billion in BTC and BCH. On-chain analytics firm Arkham reports that Mt. Gox transferred 47,229 BTC, valued at approximately $2.97 billion, today. This development has added to the existing market pressure, as investors fear additional sell-offs that could further destabilize prices. Potential actions by U.S. and German governments regarding their Bitcoin holdings are also creating uncertainty, fueling investor anxiety.

Conclusion

The current crypto market scenario is characterized by significant volatility and growing bearish sentiment. The simultaneous expiration of massive Bitcoin and Ethereum options, coupled with unprecedented liquidations, presents a precarious situation. As regulatory uncertainties loom and key support levels are tested, investors are advised to brace for potential further declines. Staying informed and vigilant will be crucial as the market navigates through this turbulent phase.