The crypto market is under intense pressure, causing Bitcoin to face a significant chance of a weekly loss resulting from rising geopolitical tensions with Iran and $14 billion of Bitcoin options set to expire this week.
Bitcoin Price Has Dropped Enormously
Bitcoin has dropped all the way down to approximately $66,000, a huge drop just in one day. Bitcoin as a result is now on track to experience a negative week. This decline is due to investors becoming increasingly uncertain due to risk globally and specifically for the bitcoin market with two huge events going on.
Impact of Tension With Iran
The continued tension with Iran has resulted in increased tension in the global markets. Increased tensions between the US and Iran have created higher oil prices and the potential for continued inflation concerns.
This has led to decreased expectations for interest rate cuts from central banks, something that would be detrimental to the continued demand for risk based assets like Bitcoin, during times of geopolitical tension investors typically move to more secure investments which in turn reduces the demand for cryptocurrencies.
$14 Billion Options Expiration Increases Market Volatility
One major factor affecting market instability is that approximately $14 billion in Bitcoin options will expire on this day. Some believe this will be one of the biggest expirations we've seen in months, and will create resulting volatility in the market.
Traders have taken a very cautious approach to trading on expiration days, as major expiration days usually see very significant and often unpredictable price movement occur.
Most Altcoins Have Also Sustained Significant Losses
Similarly to Bitcoin, most of the altcoin market has seen losses this week.
Ethereum has dropped approximately 5% this week.
XRP, Solana, and Cardano all had losses compared to Bitcoin.
Bitcoin and Market Outlook
At this time, Bitcoin is being pulled in two very strong directions:
Geopolitical uncertainty around Iran and surrounding countries
Technical pressure related to this large expiration