Bitcoin, the world's biggest cryptocurrency, slipped 8 per cent to a one-week low of $91, 377.32 on November 26, from a record-high of $99,830 on November 22, according to a Reuters report. But the token's failure to crack the $100,000 ceiling is likely to cause more downward pressure, with investors bracing for profit-taking as significant contracts expire in December, it added.
Over the past year, Bitcoin has gained 120 per cent, with around 34 per cent gained in November alone — riding high on the US elections and crypto-friendly nominee Donald Trump's victory in the presidential race.
During his elections campaign, Trump “embraced” digital assets and made promises such as making the US the “crypto capital of the planet” and building a national stockpile of Bitcoin, it said.
On December 27 as much as $11.8 billion worth Bitcoin option expire and investors are anticipating that significant moves in either direction could be triggered that day, the report said.
Nick Forster, founder of onchain options decentralized protocol Derive, told Reuters that the “call-put skew” index for the December 27 dated Bitcoin expiry showed major drop of 30 per cent drop over the past day. He said market participants have shifted toward more protective strategies.
The call-put skew is the difference in implied volatility between calls (options to buy) and puts (options to sell). “It suggests traders are hedging against potential downside risks. However, pullbacks like these are not uncommon in bull markets,” Forster said.
Foster added that there is a 68 per cent chance of Bitcoin slipping to $81,493 (down 16.03 per cent) of rising to $115,579 per cent (up 19.9 per cent) by December 27. He noted that the “close alignment suggests the market anticipates significant movements soon.”
Watchers have also cited the usual profit-taking aspect for the Bitcoin sell-off, the report said. Anthony Pompliano, founder-CEO of Professional Capital Management, in his letter to clients cited analysis which noted that long-term holders have distributed $60 billion worth of supply in the last 30-days.
Of long-term holders' supply moved since the Bitcoin's bottom of $15,479 hit during the FTX collapse two years ago, 21 per cent of it has happened in November 2024, which is the “heaviest profit-taking we have seen so far this cycle,” according to a post of _checkonchain.com on X.
(With inputs from Reuters)
