BTC price has trimmed all the gains made this week, after climbing above $27,000 and stopping short of $28,000. Down 4.4% on Friday to $26,050, the most prominent crypto has seen over $20 billion in trading volume rushing in while its market capitalization holds slightly above $507 billion.
Shifts in the price of Bitcoin often drag the market down or up with it, and this time it was not different, considering the 3% dip in the total market value to $1.09 trillion. Ethereum continued with the rout following the rejection from weekly highs of $1,750. The most prominent smart contracts token has corrected 3% in 24 hours to $1,650.
BTC Price Dumps As 26k Bitcoin Options Expire On September 1
Bitcoin has lost ground above $27,000, lacking the momentum to keep the rally intact after the hype around Grayscale’s win faded.
“After plenty of push & pull this week, Bitcoin has returned to $26K, right back where it started prior to the Grayscale news boosted crypto markets,” blockchain analytics firm Santiment said in a post on X.
Historically August and September have been some of the most bearish months for BTC price, marred with low volatility and dwindling liquidity.
According to data by Greeks.live, “26k BTC options are about to expire with a Put Call Ratio of 0.50, a max pain point of $27,000, and a notional value of $690 million.”
Key support areas starting with $26,000 and $25,000 are likely to feel the pinch as investors absorb the losses which follow renewed investor sentiment for gains above $30,000 earlier this week.
“BTC and ETH falling on the eve of expiration, causing the delivery price to move away from the maxpain point, is relatively rare,” Greeks.live said via X. “It should be caused by a renewed delay in ETF approvals, resulting in the exit of short-term bullish gaming funds.”
BTC Price Dilemma, To $30k Or $20k?
Bitcoin will likely attempt another trend reversal from the now critical support at $26,000 if investors rally behind it and buy the dip. A buy signal from the Moving Average Convergence Divergence (MACD) indicator has come at the right time when traders need assurance that a recovery to $28,000 and then to $30,000 will follow the dip.
The buy signal manifested with the blue MACD line crossing above the red signal line. Holding firmly above $26,000 would rule out a potential downfall to $25,000 which may increase the chances of BTC price tumbling to $20,000 before the 2024/2025 bull run starts.
The crypto scene in September is expected to push investors to the limits, especially with the US SEC delaying its decision on all seven spot Bitcoin ETFs’ proposals.
Experts believe the approval of a spot ETF would be one of the driving factors in the next bull market in addition to the Bitcoin halving in April 2024.
However, the Federal Reserve has hinted at hiking interest rates in September after economic indicators in August showed that the road to bringing inflation down is still long. A tighter monetary policy implies that risk assets like Bitcoin would have the momentum to keep the trend higher or may retrace further as investors turn to other traditional assets.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.