Friday’s expiration of Bitcoin futures and options (BTC) has been causing anxiety and excitement among traders as the price has oscillated without a clear trend for the past 30 days.
There have been moments of euphoria when the price briefly broke the $10,000 level earlier this month, but recently emotions have turned slightly downward as the market fell below $9,000 on Wednesday night.
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Correlation does not mean causality
Correlations between the crypto and traditional markets were booming, but now it seems that most traders have forgotten that the recent increase in correlation between Bitcoin and the S&P 500 could be the root of the current volatility in BTC prices.
There is not much to be gained by trying to understand the basis for this, although the recent decline in volume on both the spot and derivatives exchanges certainly makes it easier for algorithmic traders to impose their will.
This heated ongoing debate over whether Bitcoin futures and options could be the main factor behind the recent volatility seems somewhat pointless, as there will always be players who position themselves upwards, while short sellers expect a negative price movement.
Open Interest Can Be Misleading
After all, the numbers are pretty amazing. Currently, the total open interest of BTC futures is over $3.8 billion, while the open interest of the options markets has just reached an all-time high of $1.7 billion.
The fall in the stock market threatens the upward consolidation of the Bitcoin System price below 10 thousand dollars
But the question is, what exactly is behind those numbers?
There is less than a day before the June 26th expiration, and Bitcoin volatility is at its lowest levels since the March 12th drop. Low volatility typically indicates that professional traders do not expect large price swings, lowering option market premiums.