Bitcoin Surges Above $27,000 as Equities Rebound
Bitcoin broke the $27,000 threshold for the first time in a week, joining the upward movement in equities and in anticipation of expiring options on Friday.
After nine consecutive days of decline, Wall Street saw a recovery with the Dow Jones rising by 0.6%, the S&P 500 increasing by 1%, and the Nasdaq gaining 1.3%.
The crypto market performed even better, with the total digital asset market cap rising by 3% in the past 24 hours to reach $1.12 trillion. Bitcoin itself climbed by 3.8% to $27,167, while Ether rose by 4.3% to $1,661.
Bitcoin Options Contracts Set to Expire
A significant number of bitcoin options contracts are set to expire on Friday, coinciding with the end of the week, month, and quarter. The Block’s data reveals that the aggregated open interest in the bitcoin options market amounts to approximately $9.5 billion.
“Quarterly expiries are typically the most significant, in terms of volume and value,” stated Deribit Chief Commercial Officer Luuk Strijers. He cited previous quarters where expiries reached billions of dollars. The current quarter follows a similar pattern.
Rising Oil Prices Pose Risks
As market sentiment becomes more risk-on, investors should be cautious about escalating oil prices that have recently reached a new high for 2023. Higher energy costs can contribute to inflation and give central banks more reason to continue raising interest rates, which would have a bearish impact on risk assets, including cryptocurrencies.
Hot Take: Bitcoin Rebounds Alongside Equities
Bitcoin made a comeback, crossing the $27,000 mark after a week of decline. The surge coincided with the recovery of equities in the market and the upcoming expiration of bitcoin options contracts. The digital asset market also experienced positive growth, with a 3% increase in total market cap. However, rising oil prices pose risks to investors as they could lead to inflation and potential interest rate hikes by central banks. Despite these challenges, the overall sentiment remains optimistic for bitcoin and cryptocurrencies.
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