Cryptoassets Market Cap Swells on Fresh Rally in Bitcoin, Ethereum
Cryptoassets market cap strengthens over rally in bitcoin, Ethereum and other digital coins amidst global crackdown. This week, Bitcoin and other major cryptocurrencies re-appeared in the headlines as a combination of crowd psychology and speculation briefly drove the price of BTC/USD to the June high before retreating back below the critical level of resistance, formed by the key psychological price of $40,000.
As US earning season continued to focus on the performance of large tech stocks, crypto influencers Cathie Wood of ARK Invest, Tesla CEO Elon Musk and Twitter CEO Jack Dorsey participated in the ‘B Word’ conference panel discussion that took place last weekend, maintaining a bullish narrative for the crypto sphere.
However, the oldest crypto-asset faced selling pressure on Friday after Deribit, the world’s largest crypto options exchange by volume and open interest, settled monthly options contracts worth $1.6 billion.
Consequently, the cryptocurrency slipped from $39,800 to $38,500 after the designated settlement time on Deribit.
Market data shows that a total of 41,000 contracts expired, of which 22,000 were calls options, and the rest were put options, according to Deribit data.
While the exact nature of the expiry-related flows is not known yet, prices frequently become more volatile after expiry.
The overall market mood has been bearish since the beginning of the month, and prices dipped below the critical support of $30,000 on July 20. The cryptocurrency bounced well above the July expiry max pain point of $35,000 earlier this week and is again facing downward pressure after the expiry.
Investors typically sell calls, which offer insurance against bullish moves, when the underlying asset is expected to drop or consolidate.
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A call option gives the purchaser the right but not the obligation to buy the underlying asset at a predetermined price on or before a specific date. A put option gives the right to sell.
Bullish flows may return if the cryptocurrency establishes a foothold above the 100-day moving average (SMA) of $40,000. The average has been capping gains since Wednesday.
Cryptoassets Market Cap Swells on Fresh Rally in Bitcoin, Ethereum
