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Volatility Ahead: More Than 50K In BTC Options Contracts Set to Expire

Coinbase Bitcoin Batching Could Boost the Bitcoin Blockchain

Bitcoin has had a rough March in any measuring stick, with the coin itself halving in value in the span of a week. However, as it stands now, Bitcoin might just go for another massive spike in volatility, making it a worrying time to buy Bitcoin. A substantial number of derivatives contracts are set to expire at the end of March, and multiple renowned analysts and technical indexes are predicting a bearish impulse because of it. It’s not all doom and gloom, though, as a sharp rebound is expected thereafter.

Some Relative Stability

During the past two days, Bitcoin has mostly been trading within a range of $6,500 and $6,780. However, the thing doesn’t seem to want to push higher than that, as the moment it hits the resistance point, it falls back to the support, before merely going back up in an endless series of give-and-take.

Bitcoin has tried to break out of this range of $270 yesterday, but the sheer amount of resistance achieved at $7000 caused the coin to collapse back into its current comfortable levels.

A Looming Threat

IntoTheBlock, an on-chain metrics provider, has given data that showed more than 340,000 addresses, all holding 236,000 BTC for $7,000. The supply barrier here has had a significant influence on the pioneer cryptocurrency, stopping it from growing more and pushing it back to the $6,500 range.

After agreeing to ban Facebook’s Libra cryptocurrency, Germany is now doubling down on its plan to stop parallel currencies. Germans recently passed a strategy that touches blockchain and cryptocurrency comprehensively and vows against parallel financial systems initiated by corporations. Berlin buckles up for the fight German chancellor Angela Merkel and her cabinet passed a comprehensive blockchain strategy on Wednesday. The government believes that the economy should make use of digital transformations but must also be aware of the risks arising out of these technologies. Finance minister Olaf Scholz said that blockchain technology could become the basis for the internet of the future. He also said, “We want to be at the forefront and further strengthen Germany as a leading technology location. At the same time, we must protect consumers and state sovereignty. A core element of state sovereignty is the issuing of a currency, we will not leave this task to private companies.” The government also wants to work in close cooperation with its European and global peers to ensure that stablecoins don’t end up becoming alternative currencies. Berlin will also focus on its dialogue with German central bank, Bundesbank, to talk about a digitized version of the central bank currency and the possible risks of such coins. Germany’s move is a threat to Facebook The German government has a holistic plan to tackle growing issues with digital currencies. However, it plans on introducing electronic bonds in the domestic market that will be issued on blockchains. The government, alongside France, has already pledged to ban Libra. The French authorities have also adopted a highly critical stance on Facebook’s Libra, and they are also looking forward to launching a digitized legal tender of their own. Meanwhile, the European Central Bank is also looking forward to the creation of a public digital currency, backed by central banks, that would eliminate the need for Libra. Francois Villeroy de Galhau, a member of the ECB board, said that Libra highlighted the gaps in European regulations and said that the company would be treated with a tough approach. This would create further regulatory and operational hurdles for the American social media giant that aims to leverage its 2+ billion userbase to launch a new digital currency. Libra will be a stablecoin backed by government securities, but with European countries launching their own government-backed stablecoins, it will face stiff competition in the market.

The past few days have seen relatively low levels of volatility these past few days. With Bitcoin’s price being stable, a new threat looms ahead, warning of incoming volatility. The crypto derivatives data analytics firm, Skew, has recently gone public with a statement on the 27th of March. This statement described the expiry of 49,400 BTC in outstanding derivatives contracts. This equates to about $328 million worth of BTC options open interest.

Looming Movements

With the upcoming quarterly expiry date, Su Zhu, the CEO of Three Arrows Capital, has stressed its importance and encouraged people to watch Bitcoin’s trends.

He explained that Bitcoin has a habit of experiencing high levels of volatility during events like these. He further stated that last year’s market experienced an aggressive bounce after the backwardation to contango after the relevant expiry. Zhu warns that another such scenario could take place, as all the warnings are there.

It seems that the crypto market isn’t done yet with its excessive price movement. With any luck, the crypto market as a whole will start to calm down, and business can return to normal.

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      A journalist, with experience in web journalism and marketing. Ali holds a master's degree in finance and enjoys writing about cryptocurrencies and fintech. Ali’s work has been published on a number of cryptocurrency publications.