How Halloween can scare Bitcoin and crypto traders
The crypto market gave out a tangible drawdown the day before, bitcoin lost almost 4%.
On October 30, futures for $ 800 + million will expire.
This could increase volatility in already turbulent markets..
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Halloween Eve Could Prove Alarming Times For Bitcoin Amid Increased Market Volatility And Falling Wall Street.
Volatility is returning to the crypto market. US stock indices experienced the hardest day in recent months on the eve. Against this background, Bitcoin (BTC) also lost almost 4%, although at the time of writing it was already vigorously winning back losses.
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Halloween and the ghosts of futures
On October 30, the market will see the expiration of option contracts on bitcoin in the amount of 60 thousand BTC. This amount is equivalent to approximately $ 750 million. The analytical resource Skew recently reminded its readers about this..
60k #bitcoin options are expiring this week, $ 750mln + notional pic.twitter.com/F8fSVWUWX6
– skew (@skewdotcom) October 25, 2020
In addition to Bitcoin options, $ 76 million in ETH options will expire at the same time.
In fact, such contracts represent bets on what the Bitcoin rate will be on that day.
Top 10 Crypto Market Cap History (2013-2019)
On the day of the expiration of the contract, those who guessed the direction of the exchange rate will win, and the losers will lose their money. Many market observers believe that such events have an impact on the cryptocurrency and cause an increase in volatility..
Should I be afraid?
On the other hand, the market has seen similar events more than once. So, in September, contracts worth $ 1 billion were subject to closure, but then this could not significantly affect the price of bitcoin..
However, this time it may be different, since the markets are already scared. This probably happened against the backdrop of negative dynamics in traditional markets. As a result, the world’s main cryptocurrency lost 3.53%, which negatively affected the capitalization of the entire digital asset market.
Almost all cryptocurrencies followed Bitcoin to the south. ETH weakened by 2.56%, XRP – by 2.49%, Litecoin – by 4.33%. The main victim was the anonymous coin Monero, which sank 5.12%.
Meanwhile, the Dow suffered its highest intraday losses since June, losing 943 points, or 3.4% in the previous session..
Investors are discouraged by a combination of adverse factors such as the upcoming US presidential election and the deterioration of the world’s leading economies amid the second wave of the COVID pandemic.
The current recovery only proves once again that market volatility has increased. According to the CBOE Volatility Index, they have not shown such turbulence since the beginning of summer. Accordingly, they can react to any factor, including the expiration of options..
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