Bitcoin: In this rapidly changing world of cryptocurrencies, investors often oscillate between emotions and data. Bitcoin surprised investors again today. On Friday, the price of Bitcoin fell below $110,000, marking a decline of more than 5% this week. This decline came as approximately $22 billion worth of crypto options were about to expire. Bitcoin was trading at $109,552.6 as of 02:20 ET (06:20 GMT), having fallen below $109,000 shortly before, its lowest level in six weeks. This decline wasn’t limited to Bitcoin alone; other altcoins also saw significant losses.
Large Options Expiration and Its Impact on the Market
This Friday marked a major options expiry in the crypto market, marking the end of the third quarter. According to options exchanges like Deribit, more than $17 billion worth of Bitcoin options were set to expire. Most of these options were bullish, meaning they were expected to move higher.
Such a large expiration of options could increase market volatility. If support levels fail to hold, a sharper price drop is possible. Earlier this week, Bitcoin’s decline was linked to large transactions in the derivatives market and liquidations of approximately $1.5 billion. During such times, investors and traders are emotionally affected, as traders who seek to profit from sharp price fluctuations through options can increase market volatility.
US Economy and Federal Reserve Policies
Not only options expirations influence the price of Bitcoin and other cryptocurrencies, but US economic indicators also play a significant role. Recent economic data indicated that the Federal Reserve (Fed) may be reducing the likelihood of aggressive rate cuts for the time being.
Specifically, US second-quarter GDP growth has been revised upward to a 3.8% annual rate. It is anticipated that the central bank will now adopt a more cautious approach to monetary policy. Investors are now awaiting upcoming Personal Consumption Expenditures (PCE) inflation data, which will clarify the Fed’s next policy direction.
Crypto Miner TeraWulf Plans a Major Project
Crypto mining company TeraWulf Inc. plans to raise approximately $3 billion to expand its data center. This plan includes support from Google. The company aims to complete this funding through high-yield bonds or leveraged loan markets. If this deal is successful, it will be a significant event in the crypto mining and data center industry.
Altcoins Fall and Investor Unease
Not just Bitcoin, most altcoins also declined on Friday. Ethereum fell nearly 1.9% to $3,922.83, its lowest level in seven weeks. Ether is expected to fall by more than 12% this week.
XRP fell 3.4% to $2.75, Solana declined 4%, Cardano 2.4%, and Polygon 1%. Among meme tokens, Dogecoin fell 3%, while $TRUMP fell 1.3%. All of this indicates that the crypto market remains risky and volatile for investors.
Message to Investors
At a time when markets are volatile and sentiment is constantly changing, investors should exercise caution. This is the time to prioritize facts and less emotion in their investment decisions. Instead of hoping for quick profits, strategic and thoughtful action is the safest path.
While there are investment options in companies like Google, it’s always important to remember that no investment is guaranteed. Experienced investors are those who maintain patience even in market volatility and follow only proven methods.
Disclaimer: This article is for informational and educational purposes only. It should not be construed as investment advice. Investing in cryptocurrencies and the stock market carries risk, and it’s important to consult your financial advisor before investing.
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