Bitcoin under $80,000: ETFs, rates, and options weigh on the start of the week

A threshold crossed overnight

Bitcoin fell to $79,330 in the night from Sunday 25 to Monday 26 October, before climbing back above $80,000 in early morning, according to the Journal du Coin record. This was a new passage below this threshold after the one over the weekend. This price level describes a precise sequence, not a valid value for the whole day. This morning rebound leaves the market close to the threshold crossed overnight, in a week rich in economic appointments.

A round threshold often concentrates attention because it facilitates comparisons and market commentary. It does not constitute an intrinsic protection against a new decline. Available orders, exchange depth, and leveraged positions determine how transactions execute around this level. An incursion below a threshold can be brief or last. Its interpretation depends on the follow-up of trades and the period chosen to observe the move.

Withdrawals from listed funds

US bitcoin ETFs recorded nearly $773 million in net outflows over two sessions at the end of the previous week, according to Farside data reprinted by the Journal du Coin. The balance of these days must not be confused with that of the whole week, which had begun with inflows. Initial subscriptions can compensate for later withdrawals. The two observations are therefore compatible and describe different time windows.

To these capital movements are added monetary expectations. Probabilities calculated by FedWatch from futures markets indicate decision scenarios; they do not give the level of the policy rate. A probability of increase is not an increase in rates of the same percentage. The Fed statement of October 28 and its indications for the future will be the effective elements to examine. Available estimates can evolve until the announcement, then after the press conference.

A major options expiration

The Journal du Coin also mentions nearly $11 billion in bitcoin options expiring on October 30 on Deribit. The notional amount measures the exposure represented by the contracts, not a sum that will necessarily be bought, sold, or lost that day. The expiration organizes the end of life of the concerned options. Their value depends notably on the asset price, the strike price, and the remaining time. The holder of an option and its seller do not have the same obligations.

The effect of this expiration on the market depends on the positions and hedges already in place. Its nominal magnitude therefore does not allow alone to predict a direction or an intensity of variation. Oil adds another economic variable, through its possible influence on inflation and rate expectations. These factors allow understanding why several markets are monitored simultaneously. They do not justify either a certain forecast of a rebound or the announcement of a next bitcoin pullback.