Institutions and whales continued to sell holdings due to Bitcoin historical cycle peak jitters.
Bitcoin price tumbled below $114,500, and Ethereum price plunged more than 6% to a 24-hour low of $3,600 on Friday. This caused a selloff in the broader digital assets space.
At the time of writing, BTC was nearer to $115K, and ETH was still trading near $3600. While this looks like a slight improvement from yesterday’s data, several headwinds indicate that profit booking has not completed yet.
There is potential for further downside in BTC and ETH prices. Altcoins could also be at risk of a major selloff.
According to crypto derivatives exchange Deribit data, over $7 billion in Bitcoin and Ethereum options are set to expire today.
48K BTC options with a notional value of $5.72 billion expire today. The put-call ratio was 0.74. This indicates a mild bearish sentiment among market participants.
Moreover, the max pain price was $116,000, higher than the market price of $114,670 at the time of writing. This indicated that traders were liquidated or closed their position in response to elevated uncertainty.
Meanwhile, 350K ETH options with a notional value of almost $1.35 billion are set to expire, with a put-call ratio of 0.97. Also, the max pain point was $3,500 at the time of writing.
The higher put-call ratio and a max pain price below the market price indicate that sentiment turned bearish for Ethereum. ETH price could drop further if investors avoid buying the dip.
After a hot PCE and CPI inflation data for two consecutive months, bond traders expect the US Federal Reserve would keep interest rates unchanged in September.
Earlier, market watchers were expecting the central bank to cut rates in September and December.
However, the CME FedWatch tool showed that the possibility of a 25 bps rate cut in September fell from 73% to 39% after the latest PCE inflation print.
Investors now expect the Fed to remain hawkish on monetary policy changes during the FOMC Meeting in September.
Also, the data suggested only one rate cut of 25 bps by December this year, as inflation data and uncertainty in the markets remained higher in recent months.
Fed Chair Jerome Powell defied US President Donald Trump’s push for resuming rate cuts due to inflationary pressure from tariffs.
Trump’s new higher tariffs triggered a selloff in global stock markets.
As reported by The Coin Republic, long-term Bitcoin holders started exiting for months. For instance, Bitcoin OG Willy Woo liquidated all his Bitcoin holdings, and a Satoshi-era whale sold over $9 billion BTC, confirmed Galaxy Digital.
Recently, the largest put in Deribit history of $600 million was placed for Bitcoin price to fall below $110,000 by August 8. Also, crypto research firm Matrixport predicted a slowdown and BTC price consolidation in August.
Also, retail and institutional investors considered the historical Bitcoin cycle peak. This usually happens after 12-18 months of halving, making mid-September and October the likely peak timeline.
Popular analyst Michael van de Poppe asserted that it’s time to accumulate between the $110K-$112K levels for the next bullish run for Bitcoin price. He said August may bring stability to the market amid increased uncertainty.
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