Following yesterday’s massive surge in bitcoin prices to levels not seen since January 2018, Bitcoin prices are taking a hiatus this Wednesday ahead of the expiry of Bitcoin options on Friday. Nearly 62K Bitcoin options will expire on Friday, prompting fears of severe volatility on the BTCUSD pair.
This week’s surge in Bitcoin prices was triggered by the addition of cryptocurrency exchange services on the PayPal US platform. CEO of business intelligence company MicroStrategy, Michael Sayford recently declared in his company’s Q3 that the PayPal move has “legitimized” Bitcoin. MicroStrategy has been very active in the Bitcoin space in recent months, with the firm purchasing nearly $400m worth of Bitcoin as at mid-September.
According to digital currency market data company Skew.com, about 62,000 Bitcoin options contracts are due to expire on October 30. These contracts are now worth more than they were purchased, and many of these contracts could be exercised. If this happens, we will be in for a very volatile ride between now and the end of the month. Bitcoin prices are currently trading at 13393.15 as at the time of writing.
Technical Outlook for Bitcoin Prices
Price action on the BTCUSD daily chart shows that Bitcoin prices hit a resistance at 13809.27 before today’s correction that has now taken the price below 13400. If the corrective move continues, the BTCUSD pair would be on course to target the 13160 3.48 support level (last week’s highs). Further decline targets 12824.54, with 12467.48 also lining up as a potential target to the south. This target is the only barrier that exists before the former supply zone at 12000.
On the flip side, a bounce at 13163.48 may allow bitcoin prices to refocus on the 13809.27 price targets. However, further progress beyond this point will depend on what happens on October 30 when the Bitcoin options expire.
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BTCUSD Daily Chart
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