After the crypto market consolidated, one coin that rose very fast was Ethereum. On the other hand, Bitcoin was facing serious resistance at $54k, $55k, and $56k levels. But yesterday, the coin rallied without any type of stoppage. The price went straight from $54k to $58k without any sign of selling pressure. It was pure bullish momentum, and the seller overwhelmed the buyers by a huge margin. But how did this happen? Well, the reason why Bitcoin rises 8% in a day is the $4.5 Billion options that expired yesterday.
Bitcoin rises 8%!
After struggling between $53k and $56k for quite some time, Bitcoin managed to rise again after the recent expiry of options. It made a high of $58,548 and is currently trading very near to that at $58,250. And note, even if this is the summary of an entire day, the rally that pushed BTC by over $4k was almost 12 hrs long. Even the CEO of Voyager Digital said that the rise in the price of Bitcoin might be due to the expiry of options. He also mentioned the pattern of Bitcoin where the price of the currency dips before recovering again after the expiry of such options.
This rebound also crushes the theory of many that a Bitcoin crash is in the making. It’s now confirmed that we are moving back to $60k and even make a new All-time-high as that happens. There is also another factor that could have had some effect on the price of Bitcoin. It was the Alibaba news. Rumors suggested that the company purchased Bitcoin worth $20 billion. Yes, you heard that right! But do note that this is unverified news and probably had very little impact, if any, on the rally.
Why did the expiring option push the price higher?
Well, in options, people often bet on futures with a stop loss and a liquidation, and a target price. The expiry of options means the profits or loss they have made till then would be calculated. Those who have positions in the markets will be squared off. And this has resulted in a surge in the number of buyers in the Spot market. This surge led to an immense rise in the price of Bitcoin as there a sudden increase in the number of buyers.
ETH continues rally!
Even though BTC rose by 8% in just a few hours, Ethereum wasn’t able to make such hefty gains and was stuck between $2700-$2800. But now the rally continues again as it has managed to break through the very strong resistance of $2,800 and is currently trading at $2,850. Well, it is no doubt that Ethereum and BTC are slowly tuning out each other as they have their own applications and projects pushing their prices.
What are your thoughts on the price rise of Bitcoin? And do you think we could see $60k by the end of this week? Let us know in the comments below. Also, if you found our content informative, do like it and share it with your friends.