Bitcoin Remains at $19K as the $2.2B BTC Options Expiry Nears

by
Bitcoin
Bitcoin Remains at $19K as the $2.2B BTC Options Expiry Nears

Despite the rejection of the $20,000 resistance level on September 27, Bitcoin bulls are still optimistic about the price’s potential to bounce back. According to a four-month descending triangle, if BTC holds the $18,500 support before October ends, it could determine where the rice is headed.

Most Bullish Bets Above $21K

BTC has failed to break above the $20,000 resistance level multiple times and investors have been disappointed due to the lackluster performance. However, macroeconomic events could trigger a stronger rally.

The rally from the $22,500 support area on September 12 gave the bulls an indication that the trend is likely to continue. However, as indicated by the lower 15% of the call options placed at $21,000 or below, Bitcoin bears are more vulnerable to the expiration of the $2.2 billion monthly options.

The 1.49 call-to-put ratio shows that the large number of bullish bets on Bitcoin is skewed due to the high interest in the calls. However, as the price is near $19,000, the bears are still in control.

Only around 37 million of the total call options placed on Bitcoin are expected to be available if the currency’s price remains below $20,000 at 8:00 am on September 30. That means the right to buy Bitcoin at $21,000 or $20,000 is unavailable if the price falls below that level.

BTC Bulls May Face Regulatory Pressure

Bitcoin bulls need to see the price reach $21,000 by September 30 to avoid a potential loss of around $350 million. However, this could be very challenging since the chairman of the US Federal Reserve warned about the lack of transparency in the cryptocurrency industry.

If bears dominate the September options expiration, this could trigger further selling pressure on Bitcoin. At the moment, the price is still in a descending triangle. It’s unclear if the bulls can break out of this area and avoid further losses.

Bitcoin Adoption Returns in March 2020

The current price action of Bitcoin affects everyone, from miners to long-term investors. It’s hard to see how this will end, and support at around $20,000 is keeping the price at a level not seen since 2020.

This week’s massive profit-taking and push above $20,000 has raised concerns that the market is entering a bear market. For Glassnode, the lower levels are forcing the exit of short-term investors. These individuals referred to as “STHs,” are usually retail and speculative buyers.

It summarized:

“Network activity remains dire as network adoption levels slump to levels last seen during the COVID crisis. However, one constructive observation would be the expulsion of retail participants from the network leaving just the HODLers class, career traders, and everyday Bitcoin users remaining. That suggests the user base is at its foundational level.”

With on-chain adoption flatlining, this reset in network composition could be a positive nuance.

The LTH sector is notorious for its stubbornness during bear markets; data shows they are not in the mood to sell. “The HODLer class remains resolute with both mature coin USD wealth reaching ATHs, and a multitude of lifespan metrics fully resetting to historical lows, emphasizing the unwillingness to spend held coins,” Glassnode continued, referencing its latest data analysis:

“This suggests the majority of current market churn is associated with the Short-Term Holder class.”

“Large Supply Airgap” Threatens a $12K Return

Despite the increasing number of LTHs as investors, STHs are still expected to produce a significant downside if Bitcoin goes below the $17,600 mark. According to Glassnode, the lack of volume will likely cause a sell-off within the next bid zone, which is currently at $12,000.

The Week On-Chain states elsewhere:

“A large supply airgap is apparent below $18k until the $11k–$12k range. Trading below the current cycle low would put an extraordinary volume of Short-Term Holder coins into a deep unrealized loss, which may exacerbate downside reflexivity and trigger yet another wide-ranging capitulation event.”

A chart showing the lack of volume between the two price areas was also included. That starkly contrasted with the area of around $20,000, which is now full of interest. The macro factors that have affected BTC have contributed to the warnings about its potential to drop below $10,000.