The post Why is Bitcoin’s Price down today? What’s Behind the Fall? appeared first on Coinpedia Fintech News
The excitement that recently drove Bitcoin to a remarkable 27.9% gain in “Uptober” appears to be cooling off. On November 2, Bitcoin faced an intraday dip of 3.78%, sending ripples through the crypto market.
This decline triggered a 3% drop in the overall crypto market, which now stands at $1.27 trillion over the last 24 hours, coupled with a notable 20% decrease in trading volume.
Options Expiry Impact on Bitcoin Price
The current drop in Bitcoin’s price can be attributed to the decline in trading volumes and a probable profit-taking sentiment among investors. This action might also be related to the expiration of options contracts.
With 42,000 BTC options set to expire, totaling a notional value of $1.46 billion and a put-call ratio of 0.58, there is a significant potential impact on the market. The striking price of concern here is $30,000. Additionally, 220,000 ETH options with a notional value of $390 million, bearing a put-call ratio of 0.55 and a max pain point of $1700, are also reaching their expiry.
This contributes to the overall market sentiment that Bitcoin might be overbought.
Fluctuating Market Sentiment
Despite the initial enthusiasm sparked by the Federal Reserve’s November 1 decision to halt interest rate hikes, Bitcoin’s price has declined. This sentiment is echoed in the crypto market’s fear and greed index, which slipped from 72 to 65 within the last 24 hours.
Nonetheless, the general market sentiment remains optimistic, reflecting the resilient and confident crypto community.
Liquidation of Bitcoin Long Positions
October witnessed an upsurge in Bitcoin’s price due, in part, to the liquidation of short positions, propelling the price to a year-to-date high of over $35,000. However, the beginning of November brought about a shift, with long position liquidations surging, totaling over $21.1 million in just 12 hours on November 2.
In the preceding 24 hours, a significant $28.2 million was liquidated. This surge in long liquidations, coupled with a reduction in trading volume by over $7 billion since October 24, when it peaked at $14.7 billion, raises concerns about the sustainability of Bitcoin’s price. Notably, more than 55% of futures traders hold short positions, anticipating a possible decline.
Nevertheless, while Bitcoin’s price has dipped, some analysts maintain an optimistic viewpoint, suggesting that this could begin a new bull run in the crypto market.