Bitcoin Price Drops Sharply, Facing Important Test

Bitcoin Price Falls to 6-Week Low

Bitcoin fell 9.7% to $112,100 last week, its lowest level in six weeks, putting buyers at a disadvantage.

On August 29, a series of $13.8 billion worth of Bitcoin options contracts will expire, an event considered an important test of the current price trend.

Buyers run out of steam before $114,000 threshold

Calls totaled $7.44 billion, 17% higher than puts at $6.37 billion. However, most of the calls were placed at $125,000 or higher, which is almost meaningless at current prices.

Only 12% of calls are at or below $115,000, while 21% of puts are concentrated at $115,000 and especially concentrated at $112,000, an area that puts a lot of pressure on bulls.

Bitcoin Price Scenarios at Expiration

According to data from Deribit, which accounts for 85% of the BTC options market share, five scenarios are likely:

$105,000 - $110,000: Puts win with a net profit of $2.45 billion.

$110,100 - $114,000: Puts outpace Calls by $1.5 billion.

$114,100 - $116,000: Puts dominate $360 million.

116,100 - 118,000 USD: Calls win 460 million USD.

118,100 - 120,000 USD: Calls dominate with 1.1 billion USD.

The $114,000 threshold is considered a “strategic point” that determines the balance between the two sides.

The Fed and tech stocks become the big unknowns

Bitcoin is not only dependent on the derivatives market, but also on macro factors. Investors are waiting for Fed Chairman Jerome Powell's speech at the Jackson Hole conference. Any hint of a possible interest rate cut could help the asset price recover.

In addition, the US stock market also put pressure. A report from Morgan Stanley warned that soaring costs in the field of artificial intelligence could limit the ability of technology corporations to buy back shares, increasing caution.