Bitcoin Heads for Worst Week Since March as Prices Hold Around $46.5K

Bitcoin’s price turned choppy on Friday as the No. 1 cryptocurrency by market capitalization logged its worst weekly performance since March 2020 when the pandemic hit the global economy.

• Bitcoin (BTC) trading around $46,244 as of 21:00 UTC (4 p.m. ET). Slipping 5.7% over the previous 24 hours.
• Bitcoin’s 24-hour range: $44,180.99-$49,325.91 (CoinDesk 20)
• BTC trades below its 10-hour and 50-hour averages on the hourly chart, a bearish signal for market technicians.

A quick recap of bitcoin’s most tumultuous weekly performance since almost a year ago shows that this week’s high volatility was not caused by one simple factor. The correction earlier this week was largely triggered by an overheated derivatives market as traders rushed to exit leveraged bets (or got liquidated from positions) that had accumulated as bitcoin pushed to an all-time-high price above $58,000. A drop below $45,000 on Thursday coincided with a sell-off in the broader stock market due to rising concerns over surging bond yields, which might dim the allure of riskier assets like cryptocurrencies.

Bitcoin’s spot market looked quiet on Friday, with the daily trading volume on eight crypto exchanges tracked by CoinDesk largely flat compared with levels on Thursday. Volume spiked during the sell-off earlier this week after large bitcoin inflows to exchanges such as Gemini on Sunday, which signaled an intent by some traders to take profits as prices approached $60,000.

The market’s relatively quiet tone Friday appeared to reflect low anxiety over a key month-end expiration date on options contracts. A notional total of about $3 billion worth of bitcoin options contracts expired on Friday and the strike price with the highest open interest stood at $48,000, according to derivatives data site Skew.

“Typically, with options, the highest strike price continues to have a pull on the underlying’s spot price, which could partly explain bitcoin’s recent price action,” said Hunain Naseer, senior editor at OKEx Insights. “Now, with those options contracts out of the way, the market appears, in the short term, to be free to pick a direction.”

Muyao Shen

source:coindesk.com