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Bitcoin incurs losses before major options contracts expire

 Bitcoin (BTC) price dropped slightly in the past day, after yesterday's heavy selling brought it down to $40,200. The sale comes before one of the biggest days of the expiration of bitcoin options contracts in 2021, on September 24.


At 13:44 UTC, Bitcoin is down 1.6% over the past 24 hours at $43,255.

However, the price has already recovered from its overnight lows at $40,200, with a large bullish "wick" now emerging on the daily chart as evidence of lower buyers arriving to bid on the price.

After yesterday's sell-off, a summary of the situation from digital derivatives exchange Deribit gave some traders hope that the worst was already over, and that a rally could follow.

Despite the recovery we've seen so far, the bitcoin market is still on the brink of options expiration coming on Friday, with nearly 70,000 bitcoin in options contracts set to expire across all major exchanges, according to data from Bybt.com.

At current prices, the expiring contracts are worth about $3 billion, making it one of the biggest expiry days of the year.

Large amounts of options expiration have sometimes increased volatility in the spot markets, although this is by no means a particular outcome.

But while short-term relief can already be felt in the Bitcoin market, longer-term signals based on in-chain metrics are likely to be another cause for concern for Bitcoin holders.

According to a State of the Network report from analytics firm Coin Metrics, the market capitalization of Bitcoin to Realized Value – described as “one of the most accurate indicators on the chain to measure Bitcoin market cycles” – has now fallen to around 1.73 after hitting a high of 1.94 when it surged. Bitcoin is above $52,000.

Coin Metrics said that an index below 2 has historically indicated a “bearish zone,” without going into further details on what this might mean in the near term.

Either way, Galaxy Digital CEO Mike Novogratz claims he's not worried about the sell-off:


Meanwhile, major financial rating agency S&P Global Ratings last night downplayed the risks posed by a potential default in China real estate developer Evergrande, which is said to owe more than $300 billion.

According to the agency's assessment of the situation, the Chinese government will not provide "direct support" to China Evergrande unless there is a possibility of a "long-range infection" that poses "systemic risks to the economy".

"We believe the Chinese banking sector can digest the Evergrande default without any major disruption, although we will consider the potential implications," the rating agency said.

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