Find out why the price of Bitcoin could crash this Friday!

If Bitcoin holds above $19,000, Friday’s $2.2 billion option expiration could lead to high volatility. And, depending on the situations, push Bitcoin even lower. Let’s take a closer look! Either way, the bears seem to have their own. An important feature as we approach the monthly close.

The $20,000 resistance as a key point!

This week Bitcoin came to be tested resistance to $20,000. And the least we can say is that the mother of cryptocurrencies was firmly rejected. To reach its weekly low the next day, on the edge of 18,500 dollars. Either way, this inability to break above $20,000 may have affected some bulls.

Over the past four months, Bitcoin appears to be in a descending triangle. As the graph below indicates. Going by this reading, as long as the $18,500 support manages to hold, price will have until the end of October to determine whether the downtrend continues or breaks.

As we’ll see below with the open interest data, the $20,000 threshold is an important pivot right now. Especially as we approach the end of the month and the monthly shutdown for Bitcoin.

The data clearly shows open interest Bears advantage over bulls. In fact, most bullish bets were placed above $21,000. In mid-September, BTC’s rally near $22,500 managed to revive bullish sentiment among some investors. Currently, only 15% of call options as of September 30 are placed below the $21,000 level.

Crypto-assets are a risky investment.

The 4 possible cases (simplified).

To establish these different scenarios, we considered the difference between calls and offers depending on the price level at which Bitcoin will find itself tomorrow afternoon:

• Between $18,000 and $19,000: 500 calls compared to 19,800 calls. The differential in favor of the bears would be about $350 million.
• Between $19,000 and $20,000: 2,000 calls for 16,000 invitations. Here, the differential is still favorable for the bears, at $270 million.
• Between $20,000 and $21,000: 5,900 call options compared to 12,700 put options. The bears still have the advantage, but it would only be $135 million.
• Between $21,000 and $22,000: 10,100 call for 11,300 put. The net result would then be balanced between bulls and bears.

Note that these 4 cases are intentionally simple. They cannot take into account more complex investment strategies.

From these cases, it is understood that the threshold of $20,000 is very important for Bitcoin. A break below $19,000 could help solidify the bearish momentum and strengthen the bears’ ranks. Conversely, to reverse the trend, the bulls need to push below $21,000 by tomorrow. Clearly this does not seem to be the most likely scenario.

Especially since the bulls are coming up against renewed regulatory pressure. The day before yesterday, the chairman of the FED again called for the regulation of cryptographic activities, warning in particular about “structural issues regarding the lack of transparency“.

The end of September may also be crucial as it will lead to the UA the following month. Other macroeconomic aspects could also have their say. Because some note that the efforts of the various central banks to curb inflation are beginning to have a negative impact on business activity.

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