Bitcoin Eyes 200-Day MA Support as $2B Options Expiration Nears

Charts: Bitcoin Rally Exhausted; Support Zone at $42K-$45K

Everything you need to make sense of the crypto markets and beyond By the CoinDesk Markets Team Edited by Lawrence Lewitinn, Managing Editor, Global Capital Markets August 26, 2021 Sponsored by     Bitcoin (BTC) -1.2%  $47,003 Ether (ETH)  -1.1%  $3,101 (Price data as of August 26 @ 11:00 UTC) If you were forwarded this newsletter and would like to receive it, sign up here.  Good morning, and welcome to First Mover. Here's what's happening this morning: Market Moves: Bitcoin Eyes 200-Day MA Support as $2B Options Expiration Nears Technician's Take: Bitcoin Rally Exhausted; Support Zone at $42K-$45K And check out the CoinDesk TV show "First Mover," hosted by Emily Parker at 9:00 a.m. U.S. Eastern time. Today the show will feature guests: Brad Scrivner, Vast Bank Damanick Dantes, CoinDesk – Lawrence Lewitinn Biggest Movers These are the biggest movers in the CoinDesk 20 over the past 24 hours:   Gainers: Filecoin (FIL): +0.4%   Losers: The Graph (GRT): -4.0% Dogecoin (DOGE): -3.6% Cardano (ADA): -3.1% Aave (AAVE): -2.5% Chainlink (LINK): -2.5%   The CoinDesk 20 are 20 digital assets filtered from the larger universe of thousands of cryptocurrencies and constitute roughly 99% of the market by volume at eight of the largest and most trustworthy exchanges. A message from ByBit Earn up to $600 when you sign up with Bybit.   Bybit is one of the top crypto exchanges on Bloomberg.   Trade Bitcoin, Ether (ETH), Dogecoin (DOGE) and more!   Check out all of our exciting promotions! Lots of attractive bonuses are available when you sign up with us.   Spot, derivatives trading and other options available.   Sign Up Now! Market Moves by Omkar Godbole Bitcoin Eyes 200-Day MA Support as $2B Options Expiration Nears Bitcoin is again experiencing moderate price turbulence while heading into the monthly options expiration.   The cryptocurrency is trading near $47,000 at press time, representing a 4.4% drop on the day, CoinDesk 20 data show. The decline has reversed Wednesday's 2.7% gain and exposed the widely tracked 200-day moving average (MA) line located at $46,040   "What we are seeing is typical pre-expiry price volatility," said Phillipe Bekhazi, CEO at XBTO Group. "[The] market generally rebounds after monthly settlement."   A total of 42,500 option contracts worth roughly $2 billion are set to expire on Friday, according to data provided by Skew. The dominant crypto options exchange Deribit will settle the majority of open interest at 8:00 UTC. Bitcoin: Options open interest by expiry (Source: Skew) Data since January show bitcoin (BTC) tends to move toward the "max pain" point in the lead up to the expiration and sees a solid directional move in days after settlement. In traditional market theory, this behavior results from option sellers, mostly institutions, manipulating the spot market to push prices closer to the strike price at which the highest number of open options contracts expire worthlessly, yielding maximum losses – or maximum pain – for option buyers and minimizing losses for the sellers.   History seems to be repeating itself, as the max pain point for Friday's monthly expiration is $44,000, according to Deribit. The options market has also flipped bearish for the short term, with the one-week put-call skew reporting positive values at press time. That's a sign of short-term puts, or bearish bets, drawing higher demand than calls. The one-month skew is neutral, while the three- and six-month skews are still trading negative, indicating a long-term bullish bias. Bitcoin put-call skews (Source: Skew) A continued inflow of BTC onto crypto exchanges could also bring some price volatility. Blockchain analytics firm CryptoQuant data show Huobi exchange received 23,256 BTC at 06:08 UTC today.   "It's an actual deposit from a user," CryptoQuant CEO Ki-Young Ju told CoinDesk in a Telegram chat. Users typically transfer bitcoins to exchanges when they plan to liquidate holdings or sell coins to fund derivatives and alternative cryptocurrency trading, leading to increased price turbulence.   "Bitcoin reserve across all exchanges is increasing lately, and this could affect the market in the short term," Ju said. "These Bitcoins could be sold, used as collateral for derivative trading, or used for altcoin trading. Either way, it increases the market volatility."   From a technical analysis standpoint, the immediate bias has flipped bearish owing to the cryptocurrency's failure to keep gains above $50,000 earlier this week.   "Both bitcoin and ether (ETH) confirmed short-term counter-trend 'sell' signals per the DeMARK Indicators, which have been fairly timely in the past as indicators of short-term inflections," Katie Stockton, founder, and managing partner of Fairlead Strategies, said in an email. "The message is for another 1-2 weeks of sideways-to-lower price action."   Stockton added that while the intermediate-term momentum remains positive, some risk management may be necessary for the very near term, given the 50-day MA at $39,652 is the initial support. Meanwhile, XBTO's Bekhazi mentioned $46,800 as key support.     Read the original story here: Bitcoin Eyes 200-Day MA Support as $2B Options Expiration Nears Technician's Take by Damanick Dantes, CMT Bitcoin Rally Exhausted; Support Zone at $42K-$45K Bitcoin (BTC) dipped below $48,000 as the relief rally appears to be exhausted. Initial support is seen at the 200-day moving average around $46,000 and then at the $42,000 breakout level. The cryptocurrency has broken below a series of higher lows on intraday charts and is down about 1% over the past 24 hours. Bitcoin daily price chart shows support and resistance levels with RSI. (Source: TradingView) The relative strength index (RSI) on the daily chart displays a negative divergence with price, which typically precedes pullbacks.  Buyers are likely taking profits given multiple overbought signals, low volume, and a loss of short-term momentum.  Bitcoin will need to hold the support zone between $42,000 and $45,000 to maintain the near 50% rally from the July low around $30,000.    A Message from ErisX ErisX operates a secure clearinghouse which provides settlement guarantees and eliminates counterparty credit risk.  How do we safeguard your crypto assets? We keep them segregated and protected, as required under Money Service Business and Money Transmitter licenses and CFTC regulations. Multiple third-party audits, including SOC 2 Type II, ensure and attest to our strict security policies and procedures.   Open an account, refer a friend, and you are both rewarded $50 after they make their first trade.  BOLO Be on the look out for some of these upcoming events: 12:30 UTC (8:30 a.m. ET):  Initial jobless claims (Aug. 21). Est: 350,000 GDP revision (Q2). Est: 6.7% A Message from CoinDesk Our Bitcoin for Advisors event is back for the second year to equip investment advisors with the tools to best understand how bitcoin, ethereum and other digital assets can successfully impact their clients' portfolios. CoinDesk works with the leading investment professionals in crypto, blockchain and traditional markets including Tyrone Ross, Morgen Rochard and Adam Pokornicky to design a series of keynotes, interactive roundtables and priority-driven workshops that are relevant, valuable and actionable for the advisor community. Join us for the first time in person at Bitcoin for Advisors on Oct. 6 to connect with over 300 investment advisors who are leading the way toward the future of investing. For accredited advisors on an application basis. Register today. ICYMI In case you missed it, here are the most recent episodes of "First Mover" on CoinDesk TV:   Bitcoin Price Continues to Slide After Hitting $50K, Update on Geth's Hotfix "First Mover" looks ahead to the Federal Reserve's Jackson Hole meeting as chair Jerome Powell is expected to speak on the tapering roadmap, and Opimas CEO & Founder Octavio Marenzi shares his insight into crypto market volatility as bitcoin price slides after hitting $50K. Plus, the impact from Ethereum's London hard fork and update on Geth's hotfix. CoinDesk's research analyst Christine Kim provides her in-depth analysis. A Message from CoinDesk Introducing Crypto for Advisors, a weekly newsletter built specifically for financial advisors (FAs) and registered investment advisors (RIAs). Crypto for Advisors, delivered every Thursday, is designed to inform and educate financial professionals who seek to incorporate this rapidly moving asset class into their work. Subscribe to Crypto for Advisors today. Latest Headlines Fox Leads Investment in Blockchain Tech Firm Eluvio The deal values the Berkeley, Calif-based startup at $100 million. AriseCoin Inventor Sentenced to 5 Years in Prison for Securities Fraud Jared Rice Sr. pleaded guilty to duping investors out of more than $4 million. What Binance Smart Chain's Lagging Performance Means for Layer 1 Blockchains The former Ethereum alternative darling is far off its all-time high for total value locked. Can Avalanche Keep It Up? 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Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments.  First Mover A newsletter from CoinDesk Copyright © 2021 CoinDesk, All rights reserved.  250 Park Avenue South New York, NY 10003, USA You can manage your preferences here or unsubscribe from all CoinDesk email.