{"id":451893,"date":"2020-12-09T20:00:07","date_gmt":"2020-12-09T20:00:07","guid":{"rendered":"https:\/\/wncen.com\/?p=451893"},"modified":"2024-06-11T14:09:09","modified_gmt":"2024-06-11T14:09:09","slug":"christmas-day-derivatives-expiry-could-deliver-the-gift-of-dangerous-bitcoin-volatility","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/christmas-day-derivatives-expiry-could-deliver-the-gift-of-dangerous-bitcoin-volatility\/","title":{"rendered":"Christmas Day Derivatives Expiry Could Deliver The Gift Of Dangerous Bitcoin Volatility"},"content":{"rendered":"

Bitcoin price is still trading within striking distance of $20,000<\/a>, however, momentum could be turning toward the downside after the critical resistance was unable to be broken again. Interestingly, the first-ever cryptocurrency has found itself at a similar price as 2017, and a similar point in December.<\/p>\n

The last instance led to a substantial over 60% drop in just weeks, and extreme volatility kicked in around Christmastime. This Christmas, crypto Santa could be once again bringing the gift of wild Bitcoin volatility, and potentially, lower prices, thanks to the holiday coinciding with a massive derivatives contract expiry.<\/p>\n

Remembering December 2017: Comparing Crypto Price Action And Sentiment Then Versus Now<\/h2>\n

Rewind to three years from this date. Bitcoin price had just touched $17,200, then suffered a sharp correction taking it back to $12,500. Finding support there, gave the cryptocurrency the momentum to reach its now-former all-time high<\/a> of just under $20,000.<\/p>\n

Three years have since passed, and after taking out $12,500, Bitcoin is back trading above $17,200 and was potentially stopped shy of $20,000 again. Both times market participants were clamoring for $100K BTC and higher<\/a>.<\/p>\n

\"bitcoin<\/p>\n

Looking back at the cryptocurrency's price action three years ago | Source: BTCUSD on TradingView.com<\/a><\/pre>\n
And while the participants themselves this time are very different this time around<\/a>, creating different dynamics that are undeniably more bullish for the cryptocurrency now, because it remains a speculative asset with unrivaled historical volatility, ruling out repeat scenarios where selloffs become frightening fast, is just plain foolish.<\/p>\n
Related Reading | Bitcoin \u201cDouble Top\u201d Narrative Builds, Factors To Potentially Fear<\/a><\/strong><\/em><\/p>\n
Resistance above $20,000 is strong, and the cryptocurrency hasn’t had a decent correction since its retest of $10,000<\/a>. A full $10,000 trading range is now unaccounted for and untested as resistance turned support.<\/p>\n
Of course, as past bull markets have shown, once the cryptocurrency revisits highs, it doesn’t often come back down for a breather. But something big and decisive is potentially brewing, and it could be coming on Christmas day.<\/p>\n
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QCP Analysis 9.12<\/p>\n
1\/ Going into this month\/quarter\/year-end expiry on 25 Dec we can expect to see some volatility, considering the magnitude of this quarter's rally as well as the expected record open interest for all derivative markets across the board in both options & futures pic.twitter.com\/rRn5ztuRoz<\/a><\/p>\n
— QCP (@QCPgroup) December 9, 2020<\/a><\/p><\/blockquote>\n