Bitcoin on the brink of volatility: What to expect on Friday

Bitcoin on the brink of volatility: What to expect on Friday

Hopes and fears are mingling in the bitcoin space, where Deribit CEO Luuk Strijers warns of possible volatility in the market. Although the bitcoin price is still above the $60,000 mark, Friday is expected to bring changes that could shake the current stability.

The strong influence of interest rates

The recent interest rate cut by the US Federal Reserve (Fed) has had a positive impact on the cryptocurrency market. Bitcoin climbed to over $64,000, while Ethereum surpassed $2,600. Analysts have positive predictions and expect further growth as a result of this support. However, Strijers points out that short-term volatility could cause significant price fluctuations.

Options expiration and expected turbulence

One of the main factors that could affect the market is the expiration period of a large number of bitcoin and Ethereum options. Approximately 90,000 bitcoin options worth $5.8 billion and $1.9 billion in ethereum options are scheduled to expire on September 27. Strijers warned that about 20% of the expiring bitcoin options are "in the money," which could contribute to an increase in market volatility.

"This higher maturity is likely to increase market volatility or activity as investors close out or roll over their positions," Strijers warned. Thus, it is expected that prices may fluctuate as investors react to the situation.

A glimpse into the future: optimism from ETFs

Despite short-term fluctuations, Luuk Strijers expresses optimism about the future of bitcoin. He expects an increase in value in the coming months, which will be supported by the expected approval of spot ETFs for bitcoin. He points to a significant move by the SEC regarding BlackRock's ETF (IBIT) that could accelerate institutional adoption of bitcoin.

Strijers explained that while the SEC has given the green light for approval, other regulators such as the OCC and CFTC remain cautious about approval. Although the prices of soon-to-expire options suggest a bullish trend, one must take into account the fluctuations that may follow.

Conclusion

The effects of Friday's options expiration on bitcoin and ethereum will be watched with great suspense. While the market looks optimistic, the likely turbulence may bring not only investment opportunities but also risks. It is important to stay informed and ready to react to the rapid changes that the coming days may bring.

Coingarage Team