Cryptocurrency markets experienced a downward trend ahead of what could be a tumultuous end of the week, as significant options expirations approach. Bitcoin saw a decline of 1.6%, trading at approximately $4,000, while Ether dropped as much as 4.8%, reaching its lowest value in nearly seven weeks before slightly rebounding to around that pivotal level. Overall, the digital asset market has witnessed a staggering loss of around $140 billion in value this week.
The volatility is expected to escalate, with more than $17 billion in notional open interest linked to Bitcoin and about $5.3 billion for Ether expiring on Friday, as detailed by the derivatives exchange Deribit. Industry analysts have raised concerns about the implications of the current decline, especially for Ether. Tony Sycamore, an analyst at IG Australia, indicated that if Ether closes below $4,000, it might face further declines, potentially hitting the $3,700 to $3,500 range.
The recent downturn in Ether’s value is attributed to “cooled” institutional inflows, with technical indicators suggesting short-term pressure on the asset, according to Rachael Lucas, a crypto analyst at BTC Markets. Since Monday, investors have withdrawn nearly $300 million from US-listed Ether exchange-traded funds following a significant downturn that wiped out $1.7 billion in bullish bets across major tokens. Lucas anticipates that additional liquidations may occur if Ether continues its decline, particularly if it drops below the $3,800 threshold.
As the weekend approaches, market participants are on alert for potential shifts that could arise from the large volume of options expiring, which could further impact the prices of these leading cryptocurrencies.
