Leverage build-up suggests near-term liquidations before BTC resumes upward momentum and targets a new ATH.
Tomorrow’s market session could get rough. A record $4.9 trillion worth of stock and ETF options will expire. That’s bigger than the entire crypto market cap.
Past events of this size have rattled markets, and traders are already on high alert. Risk builds as leverage positions stack up, and many expect liquidations before any rebound.
Market analyst Ted shared that this expiry is almost 1.2 times the total value of the entire crypto market. He pointed out that March’s expiry led to a selloff lasting weeks. June’s expiry caused Bitcoin to fall below $100,000 before recovering.
The current setup mirrors those events. With positions stretched, forced unwinds often hit both equities and crypto. Ted said he has seen this play out many times and expects a flush before any rally.
Traders are now cautious. Many wait for the event to play out before taking big directional bets. The risk lies in a cascade of liquidations that could drag prices lower in the short term.
Despite the potential for near-term pain, Ted suggested that Bitcoin could rally to a new all-time high once leverage resets.
Hunter Horsley, CEO of Bitwise, said credit markets will dominate the crypto story within the next year. He believes the sector will grow rapidly as more assets become collateral for borrowing.
He explained that there are trillions in crypto assets that holders would prefer to borrow against rather than sell. This could create new liquidity sources across the industry.
Horsley also mentioned that tokenization could unlock borrowing against traditional stocks. This would bring a new wave of onchain finance activity, opening access to capital for more investors.
For traders, this could mean more tools to manage positions during volatile events like this week’s expiry. It also signals that crypto’s role in capital markets may expand as new credit rails form.
