Bitcoin Price Stabilizes At $47k - Market Focuses On Options Contract Expiry.

Bitcoin Price Stabilizes At $47k - Market Focuses On Options Contract Expiry.

2021-12-31 | Daniel Smith

Bitcoin Price Stabilizes At $47k - Market Focuses On Options Contract Expiry.

Bitcoin fell further on Thursday, trading around $47,000 following a somewhat more than 6% dip the day before. Owing to the end-of-year winter holidays, the No. 1 crypto by market capitalization had yet a further low daily volume across controlled exchanges. The market's focus remains on the December 31 expiration of the options contract.

As per Skew statistics, 124,700 options contracts worth over $6 billion are slated to terminate on Friday. Futures are hedging mechanisms that provide the buyer with the opportunity, however not the duty, to acquire the fundamental asset at a fixed price on or before a particular date.

Simultaneously, smart contract system tokens algorand (ALGO) and near (NEAR) recorded the most daily increases throughout US trading hours on Wednesday. ALGO's gains occurred after the Algorand Foundation launched a liquidity reward scheme with Algofi, Algorand's inaugural algorithmic money market and stablecoin technology.

Money out of funds

Ruffer Investments, a U.K.-centered asset management firm, was among the first large institutional investors to place a wager on bitcoin, beginning in November 2020.

Ruffer simply surfed the tide as prices skyrocketed in early 2021, whereas several fund managers were just getting their feet wet in cryptocurrency, enticed by the possibility for large profits.

However, particularly Ruffer was caught aback by the intensity with which bitcoin's price rose at the beginning of the year to a fresh all-time high of approximately $65,000. Ruffer then cleaned out. The market appeared untenable.
According to the Sunday Times, Ruffer generated a $1.1 billion gain in five months.

Extremely optimistic attitude

In relation to market reversion, it won't work that various crypto-market signals were indicating extreme purchasing activity in the month or two preceding up to bitcoin's April price top. For instance, in March, Alternative.me's Crypto Fear & Greed Index hit its highest level from June 2019, before an almost 60% drop in BTC price.

The cryptocurrency sector reacts to environmental, social, and governance (ESG) problems.

As lingering environmental worries about bitcoin's ecological impact persisted to drag on the market, leaders in the crypto business took action.

Elon Musk, the billionaire Tesla CEO whose market-moving comments earlier this year indicated an on-again, off-again fascination with bitcoin, has shown a renewed willingness to engage in cryptocurrency sector debate about the Bitcoin blockchain's power use. Musk posted towards the close of May that he has spoken with bitcoin miners about employing renewable energy options. He wasn't abandoning bitcoin entirely, which gave pessimistic bulls some optimism.

The introduction on May 24 of the Bitcoin Mining Council, which brought united miners and significant investors such as MicroStrategy CEO Michael Saylor, pushed BTC up about 12% instantly.

btc

BTC/USD 1 DAY PRICE CHART: SOURCE - COINMARKETCAP.COM

BTC's price ultimately steadied at around $30,000 in June, when the tremendous selling pressure started to subside. The graph beneath depicts the approximately 50% price decline during April and June. Then, in July and August, bitcoin generally moved sideways, forming a new pricing structure as several technical indications showed the price of BTC was overbought.

The issue in crypto traders' minds was if the current market environment signified a stop on the road down or the start of a significant leg up.

Price changes were significantly less erratic than in current months, and it appeared that many investors still trusted in bitcoin's lengthy viability as a measure of wealth. Bitcoin miners stated to be searching for ways to limit or offset their ecological impact, and the majority of the network's mining power has been shifted far from crypto-unfriendly China.

Furthermore, traders were not utilizing as much pressure, and market conditions appeared to have significantly calmed. To put it another way, there wasn't much foam.

A crucial conclusion was that, notwithstanding what appeared to be an unending barrage of bad stories for the bitcoin market, the price was holding up quite well historically: the April all-time high of approximately $65,000 was already seeming far off.

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