The upcoming $1.9 billion Bitcoin (BTC) monthly options expiry on Aug. 25 is crucial for determining the sustainability of the $26,000 support level. Various macro and crypto-specific factors are expected to influence the outcome. While the recent market sell-off can be attributed to the SEC’s decision to delay Bitcoin ETFs, the U.S. Federal Reserve’s efforts to curb inflation and the strength of the U.S. dollar also play a significant role.
Bitcoin bulls must ensure that the price remains above $27,000 to prevent a potential loss of $380 million due to the expiry. On the other hand, cryptocurrency bulls face regulatory challenges, as exchanges like Binance and Coinbase are entangled in lawsuits with the SEC. Additionally, Bitstamp’s decision to halt staking services for U.S.-based clients and the ongoing classification debate of ETHEther (ETH) is used to pay for computation and token swaps on Ethereum. Users "fuel" smart contracts and DApps with ETH. as a commodity or security add to the regulatory concerns.
Despite optimistic projections, the recent correction in Bitcoin’s price caught many bullish investors off guard. The options open interest for the expiry stands at $1.9 billion, but the actual amount is likely to be lower. Depending on the price action, there are different scenarios favoring either call or put options. To level the playing field, bulls need a 6% price increase, while bears only require a modest 2% correction below $26,000.
Considering Bitcoin’s repeated drops below the $26,000 support level and the prevailing bearish momentum, it is possible that this level will be tested again after the options expiry.
