Here are some reasons why cryptocurrency is going down today.
- *Bitcoin is in its standard pre-halving retrace*: Some analysts believe that Bitcoin is at the beginning of the pre-halving phase that historically follows a certain pattern. Similar to previous halvings, BTC’s price appears to be following the five phases of the Bitcoin halving.
- *Bitcoin liquidations ramp up*: A sharp movement in the Bitcoin futures market can be noted by looking at liquidations. The timing of the long liquidations coincided with elevated volatility.
- *Derivatives*: Crypto sank into the red as derivatives traders began liquidating hundreds of millions of dollars in options and futures contracts.
- *Options expiration*: As prices continue to sag, a large volume of August Bitcoin options contracts are expiring out of the money this week—a term indicating that an options contract has expired without turning a profit.
- *Expiring out-of-the-money options triggered the liquidation of Bitcoin futures*: This has driven a feedback loop where crypto prices fall, options expire unprofitably, and futures get liquidated, thereby intensifying the downward pressure on prices.
