Bitcoin price is on track to drop for three consecutive weeks as traders brace for a $15 billion options expiry and as risky chart patterns form on the weekly chart.
- Bitcoin price has crashed for three consecutive weeks.
- BTC and Ethereum options worth over $15 billion will expire today.
- Technical analysis points to more BTC price dips.
Bitcoin (BTC) price plunged to $108,000 on Friday, Aug. 29, down significantly from the all-time high of $124,200, and there is a risk that the downtrend could continue if it loses a key support.
Bitcoin price tumbles ahead of a key options expiry
Crypto and stocks often plunge or remain highly volatile ahead of a major options expiry. It is common for the stock market to plunge ahead of he triple-witching event when options of stocks and indices expire.
Bitcoin price is dropping as investors wait for a major options expiry worth over $15 billion. Data compiled by Deribit, one of the top derivatives exchanges, shows that short sellers target a Bitcoin dive to between $95,000 and $110,000.
More data by CoinGlass shows that options open interest has jumped in the last three days, reaching a high of $57 billion on Friday. A rising options open interest is common towards a major expiry.
Bitcoin price often rebounds a few days after the options expiry date, and this could happen soon as the weighted funding rate has remained positive in the past few months.
The risk this time is that the expiry is happening at a time when investors are embracing a risk-off sentiment. For example, the top indices like the Nasdaq 100 and the Dow Jones dropped by 1.10% and 0.35% on Friday, with Nvidia leading the losses. They also dropped after a report pointed to sticky consumer pricesin the US.
BTC price risky chart pattern is concerning
The other notable risk is that Bitcoin has been slowly forming a highly risky pattern since March last year. The weekly logarithmic chart pattern shows that it has formed an ascending wedge pattern.
Its upper line connects the higher highs since March 11 last year, while the lower line links the lowest levels since August. These lines are nearing their convergence, risking a stronger crash in the coming weeks.
The bearish BTC price forecast will be confirmed if the coin drops below the lower side of the wedge pattern at $105. If this happens, there is a risk it could plunge to the support at $74,470, its lowest level in April.
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