Bitcoin traders and investors pay close attentions to traditional markets that have tanked this week.
A series of positive developments have promoted Bitcoin price to climb over 20% within past 30 days, however, it has soon begun to wobble, with warning signals showing to Bitcoin traders - some of whom were already anticipating a correction.
Currently, Bitcoin traders have shifted their attention to 60,000 kinds of Bitcoin options that are expected to expire on Friday, October 30, probably sending a $750 million shock through the increasingly unstable-looking Bitcoin market.
The Bitcoin options market enables traders to bet on what they expect the price of Bitcoin to be in the future. This year witnessed an explosive growth shows in the market, with an astonishing $1 billion rise in the last month alone and a current value of more than $2.5 billion, as per data from Bitcoin and crypto market analysis company Skew.
The impending $750 million Bitcoin options expire could refer to wild Bitcoin price swings. After options expiring, the trader that made the bet will either get a payout or lose their stake. Up till to 2020, an influx of institutional investors and Deribit's (a Panama-based derivatives exchange, which currently takes part of almost $2 billion worth of Bitcoin options contracts) support have led the Bitcoin option market to boom.
At meantime, the Bitcoin price has enjoyed a significant surge this month, hitting the bark of $13,800 and currently trading at $13,225. This surge may possibly stem from a raft of bullish Bitcoin news and increasing confidence from some investors that Bitcoin will serve as a hedge against a tidal wave of inflation they see on the horizon.
However, the Bitcoin price has abandoned some of its gains within the past 24 hours, as well as the falling global stock markets that have balked at soaring coronavirus cases around the world.
"Some momentum technical indicators are still flagging the bitcoin price as being somewhat overbought," Simon Peters, bitcoin and crypto analyst at brokerage eToro, said via email. "I wouldn't be surprised to see a pullback, hopefully staying above $13,000. If bitcoin dipped below the $12,000 resistance level we saw previously, I would be happy to see it hold as support."