Bitcoin price news: BTC gives up early Monday gains, falling back below $88,000

Crypto markets continue to decline ahead of options expiration and cautious sentiment

The cryptocurrency market is experiencing a downturn as traders brace for a record options expiration this week. Bitcoin, which had previously reached above $90,000, has now fallen below $88,000, demonstrating the volatility that has characterized the market. Ethereum also saw a drop, slipping back under the $3,000 mark. This shift in prices indicates a cautious approach among investors as they navigate the current market landscape.

Bitcoin and ETH see prices drop amid thinning liquidity and market fluctuations

On Monday, Bitcoin was priced at approximately $88,237.14, reflecting a steady decline throughout the U.S. trading session. The price fluctuations between $85,000 and $90,000 have raised concerns, particularly as liquidity in the market appears to be thinning. This scenario is prompting many traders to adopt a more defensive stance as they prepare for the upcoming expiration of options contracts.

Crypto-related stocks hold gains even as Bitcoin slips below $88,000

Despite the decline in cryptocurrency prices, some stocks linked to the crypto sector are still performing well. Hut 8, for instance, has seen a 16% increase in its share prices following a recent agreement for a long-term lease on an AI data center. Other companies like Coinbase and Robinhood have also maintained their gains, although they are far from their session highs. This divergence in performance highlights the complexities of the current market, where crypto prices do not always correlate directly with the performance of related stocks.

Traders adopt defensive positions as options expiry approaches this week

As the record-setting $28.5 billion in Bitcoin and Ethereum options expiration approaches, traders are adjusting their strategies. Notably, Bitcoin's "max pain" level is identified at $96,000, where option writers would benefit the most. A significant portion of open interest, around $1.2 billion, is concentrated at the $85,000 strike in puts. This could lead to downward pressure on spot prices if selling intensifies. Additionally, the market is witnessing a shift from December put options to January put spreads, indicating a cautious outlook as traders prepare for potential future volatility.