47% of Bitcoin contracts expire, the future direction of the digital currency market

In the current digital currency market, Bitcoin is the most representative cryptocurrency, and the dynamics of its contract expiration have a profound impact on the market. Especially when 47% of Bitcoin contracts are about to expire, the focus of market participants will undoubtedly be on the changes that may be triggered by this event. This article will explore the reasons behind this phenomenon, possible market reactions, and how investors should deal with the upcoming challenges and opportunities.

With the popularity of digital currencies, Bitcoin contract trading has gradually become a popular investment method. The essence of contract trading is that investors do not directly own Bitcoin, but speculate on its future price through contracts. This method brings liquidity to the market, but also increases the risk of price fluctuations. When a large number of contracts are about to expire, the supply and demand relationship in the market will change significantly, and investor sentiment will also be affected.

First, market volatility tends to intensify before the contract expires. This is because investors will close, hedge or reopen positions before the expiration date, resulting in a surge in market trading volume. According to historical data, market trading volume usually increases significantly in the few days before the contract expires. For example, on the expiration date of the contract in March 2021, the market's trading volume increased by more than 50% compared with normal days. This phenomenon usually reflects investors' different expectations of the future market trend, which in turn leads to sharp price fluctuations.

Secondly, changes in investor sentiment can also affect market trends. When a large number of contracts are about to expire in the market, many investors will begin to adjust their investment strategies. Some investors may choose to lock in profits, while others may increase their investment when prices fall back. Past data show that on the eve of contract expiration, investor sentiment often shows a polarized trend. On the one hand, optimistic investors may push up prices, while on the other hand, pessimistic investors may increase selling pressure and cause prices to fall.

In this case, the technical analysis of the market is particularly important. Technical analysts usually use chart patterns, support levels, and resistance levels to predict price trends. For example, when the price of Bitcoin approaches an important support level, investors may choose to enter the market to buy, and vice versa. Combined with the factor of contract expiration, technical analysis can help investors better grasp the rhythm of the market.

In addition, contract expiration may also trigger changes in the market's supply chain. The issuance mechanism of Bitcoin is completed through mining, and when the contract expires, the number of Bitcoins circulating in the market will be affected. When market demand remains stable or rises, the expiration of the contract may cause a short-term reduction in the supply of Bitcoin, thereby driving up prices. This phenomenon is not uncommon in history. For example, during the surge in Bitcoin prices in 2017, the impact of contract expiration directly led to a rapid rise in prices.

However, market changes are not limited to price fluctuations. The news of contract expiration will also affect investors' confidence in the entire digital currency market. Market participants tend to pay attention to the movements of large investors, especially on the eve of contract expiration. If large investors choose to buy or sell in large amounts, this will have a significant impact on the market. In addition, the regulatory policies of the market may also be reviewed at this moment. As countries tighten their supervision of digital currencies, contract expiration may become a node for policy changes, affecting the long-term development of the market.

In this context, investors need to be more cautious in dealing with the upcoming market fluctuations. First, it is recommended that investors do a good job of risk management and set stop-loss positions to prevent losses caused by drastic market fluctuations. Secondly, pay attention to changes in the fundamentals and technical aspects of the market and adjust investment strategies in a timely manner. In addition, investors can also consider diversifying their investments to reduce the risk of a single asset.

It is worth noting that contract expiration is not only a risk, but also an opportunity. For investors who can accurately grasp the pulse of the market, the volatility brought by contract expiration may become a good opportunity to gain profits. Before the contract expires, there are often some short-term trading opportunities in the market, and smart investors can use these opportunities for arbitrage.

In summarizing this phenomenon, we can't help but think about how the digital currency market will develop in the future. With the advancement of technology and the maturity of the market, contract trading will become more and more popular, but it will also be accompanied by greater risks and uncertainties. Investors need to continue to learn and adapt to market changes in order to remain invincible in this rapidly developing field.

Finally, in the face of the upcoming Bitcoin contract expiration, market participants must keep a clear head and rationally analyze market dynamics. Although market volatility may bring short-term panic and anxiety, in the long run, smart investment decisions will open new windows of opportunity for investors. No matter how the market changes, maintaining a learning and adapting mentality is always the key to investors' success in the digital currency market.

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Recently, the price of Bitcoin has been hovering above $10,000, and $11,000 is difficult to cross. The DeFi market has been cold. After the contract expires on Friday, how will the market go?

In essence, the Bitcoin market welcomes market fluctuations, and at the beginning of this week, the price of BTC fell sharply from $10,980 to $10,286. The rapid depreciation of Bitcoin is the result of the market's strong recovery efforts in the previous week.

As Bitcoin finally broke free from its shackles on September 14, its value was raised and reached $11,183 on September 19. This is the first time this month that the value of the largest cryptocurrency BTC has reached such a high level, but it could not withstand the resistance at this level and eventually collapsed.

According to data from Glassnode, while the market recovered, Bitcoin's three indexes of network health, liquidity and sentiment all rose, and the on-chain fundamentals were strong.

Bitcoin's overall network index strengthened again, which not only led to an increase in on-chain BTC transactions, but also an increase in the supply and accumulation of stablecoins. Network health saw a 16% increase as more BTC addresses were created, while transactions and trading liquidity both surged.

As BTC prices rose, investor sentiment and savings behavior also rose. The price increase prompted traders to acquire more Bitcoin, which led to the previous reluctance to sell in the market. However, Monday's drop may have hurt some traders, except for those who expected the impact of the Dow Jones futures expiration on Monday morning.

The correlation between digital gold and the stock market has remained strong since the Black Thursday incident in March, although this was hit between September 7 and September 9, when the price of BTC fell below $10,000, but Bitcoin's growth almost coincided with the rebound of the stock market, which also witnessed a similar trend.

With 47% of the existing BTC contracts expiring on Friday, traders may also need to keep a close eye on stock market trends.

However, according to some investors, the current results shown by the options market suggest that the upcoming contract expiration may become a non-event. Supply has dropped to a one-month low, and only a few traders need to close their positions.

At the same time, given the high volume of institutional investors, Bitcoin may not be as vulnerable as people think before the previous contract expires. Volume has been high since August 31, and if this volume continues until Friday, the huge contract expiration may become a dud.

However, even if the price of Bitcoin does fall after the expiration, the recovery after the decline may be faster than expected given the active trading behavior in the market.