Bitcoin holds $56k support amid heightened volatility as options expiry looms Bitcoin holds $56k support amid heightened volatility as options expiry looms
The $56,000 support has become a focal point for traders, as more than $1.4 billion in Bitcoin options are set to expire at 8:00 A.M. UTC.
2 min read
Updated: Aug. 16, 2024 at 12:46 am UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Bitcoin briefly fell below $56,000 on Aug. 15 before marking a slight recovery above $57,000 amid heavy volatility in anticipation of the expiry of a large volume of options contracts.
The looming expiry could trigger significant volatility, with traders closely watching whether the crucial support level will hold. In the past 12 hours, Bitcoin has fluctuated around $56,000, a level that has been tested repeatedly but has managed to hold so far.
This support has become a focal point for traders, as more than $1.4 billion in Bitcoin options are set to expire at 8:00 A.M. UTC. The outcome of this expiry could set the stage for Bitcoin’s price direction in the coming days.
As of press time, BTC was down 2.2% over the last 24 hours and trading at $57,620, based on CryptoSlate data.
Heightened volatility
Historically, options expiries have been associated with heightened volatility in the crypto market, and this event appears to be no different. The “max pain point” — the price at which most options contracts would expire worthless — is at $60,000.
With Bitcoin currently trading below this threshold, there is increased pressure on the market as bears and bulls battle for control.
Market sentiment has been mixed in the lead-up to this expiry. After briefly regaining momentum earlier in the week, Bitcoin’s price tumbled over 4.5% in the last 24 hours before the small recovery, suggesting that bearish forces are gaining the upper hand.
Some analysts caution that a break below $56,000 could lead to further declines, potentially dragging the flagship crypto into a deeper correction.
Institutional sentiment
However, not all indicators point to a bearish outcome. Institutional sentiment, while recently wavering, could swing back in Bitcoin’s favor. Farside Investors data showed a reversal in ETF inflows, with net outflows of over $81 million on Aug. 14.
The shift has raised concerns that institutional investors are hedging against potential downside risks. Yet, favorable macroeconomic conditions — particularly a lower-than-expected Consumer Price Index (CPI) reading — could reignite demand for Bitcoin as a hedge against inflation.
With the options expiry just hours away, the market remains on high alert. Traders and investors are bracing for potential turbulence, with many anticipating that the outcome of this expiry could influence Bitcoin’s trajectory for the rest of the month.
Bitcoin Market Data
At the time of press 12:46 am UTC on Aug. 16, 2024, Bitcoin is ranked #1 by market cap and the price is down 1.97% over the past 24 hours. Bitcoin has a market capitalization of $1.14 trillion with a 24-hour trading volume of $35.59 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 12:46 am UTC on Aug. 16, 2024, the total crypto market is valued at at $2.04 trillion with a 24-hour volume of $74.89 billion. Bitcoin dominance is currently at 55.72%. Learn more about the crypto market ›
Author 
Assad Jafri
AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.
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