Bitcoin (BTC) briefly breached $25,000 on Aug. 15, but the excitement lasted less than an hour before retracing 5% over the next five hours. The resistance turned out to be stronger than expected, but may have given bulls false hopes for the upcoming $335 million weekly options expiration.
On Aug. 17, after BTC, investors’ brief optimism returned to a seller’s market sell-off and a test of support at $23,300. The negative move came hours before the release of minutes from the Federal Open Market Committee (FOMC) July meeting. Investors are looking forward to some insight on whether the Fed will continue to raise interest rates.
On Aug. 16, a U.S. federal court authorized the Internal Revenue Service (IRS) to compel cryptocurrency broker SFOX to disclose the transactions and identities of customers who are U.S. taxpayers. The same strategy was used to obtain information from Circle, Coinbase, and Kraken between 2018 and 2021.
This movement explains why betting on Bitcoin over $25,000 on August 19 seems like a sure thing. A few days ago, this would incentivize bullish bets.
Shorts do not expect BTC to exceed $24,000
August open interest. 19 options expire at $335 million, but the actual number will be lower as the bears are overly optimistic. Those traders may have been fooled by a brief sell-off to $22,700 on Aug. 10, as their bets on the August options expiration fell to $15,000.