Crypto Market Braces for Volatility as ‘Max Pain’ Price Looms at $29,000 for Bitcoin and Ethereum Prices
The crypto market anticipates volatility as the monthly expiry of Bitcoin and Ethereum prices coincides with key rate hike decisions from major central banks, with $3.12 billion worth of options set to expire, putting traders on high alert for potential price swings.
The crypto market anticipates potential volatility as Bitcoin and Ethereum prices face a monthly expiry alongside major central banks’ key rate hike decisions, with $3.12 billion worth of options set to expire, triggering high alert among traders for potential price swings. (PHOTO: Forkast News)
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Crucial Central Bank Rate Hike Decisions and $3.12 Billion Options Expiry Trigger Volatility Fears for Bitcoin and Ethereum Prices
The crypto market is bracing for a potentially volatile period as the Bitcoin and Ethereum prices are set to have a monthly expiry and coincide with crucial rate hike decisions from major central banks. The US Federal Reserve, European Central Bank, and Bank of Japan are all making key decisions on interest rates in response to economic conditions and rising inflation risks. As a total of $3.12 billion worth of Bitcoin and Ethereum prices options are set to expire, traders are on high alert for potential price swings.
Bitcoin and Ethereum prices are currently facing downward pressure due to the impending options expiry and technical indicators suggesting a monthly close below important support levels. The Bank of Japan, in particular, is making adjustments to its yield curve control (YCC) policy to manage inflation risks and sustain its stimulus measures. The central bank has decided to maintain its interest rate at -0.1%, which has caused volatility between the US Dollar and the Yen. This was reported in CoinGape.
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Critical Options Expiry: Bitcoin and Ethereum Prices Face Liquidation Risks as $3.2 Billion Worth of Contracts Near ‘Max Pain’ Levels Amidst US Dollar Index Volatility
On Friday, July 28, a significant amount of Bitcoin and Ethereum price options, approximately 71,000 BTC with a notional value of $2.08 billion, will expire. According to CoinMarketCap, with a Put/Call Ratio of 0.57, call open interests stand at 45,396, put open interests at 25,874, and the critical “max pain” price point is $29,000, posing potential financial loss for the majority of options holders.
At the time of expiry, Bitcoin is trading near the $29,150 level. Additionally, 601,000 ETH options worth $1.12 billion are set to expire, with a Put/Call Ratio of 0.37 and a max pain price of $1,850. Presently, the ETH price is trading above $1,857. Both cryptocurrency traders face potential liquidation risks, given the likelihood of Bitcoin and Ethereum prices dropping below their respective max pain prices of $29,000 and $1,850.
The US Dollar Index (DXY) is showing volatility, hovering around 101.71 on the day of the Bitcoin expiry. If the DXY rises further in response to macroeconomic events, Bitcoin and Ethereum prices are anticipated to decline. Over the past 24 hours, the BTC price has fallen 1%, and over a week, it has dropped more than 2%, currently trading at $29,185. The 24-hour trading volume has also decreased by 17%, indicating a lack of enthusiasm among traders. Similarly, the ETH price is under pressure due to selling activity by large holders (whales) and profit-taking by futures traders at higher price levels. Ethereum is currently trading at $1,858, down 1% in the past 24 hours.
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