Stocks today: Bitcoin tumbles, options expiration
Bitcoin (BTC-USD) is continuing to tumble following a selloff that started Thursday afternoon. Meanwhile, options expiration is adding some volatility to the trading day. Yahoo Finance Markets Reporter Jared Blikre breaks down the market action.
Video Transcript
- Bitcoin has recovered slightly after briefly dipping below the $20,000 mark, following reports that Elon Musk's SpaceX had offloaded the cryptocurrency. Another event you need to keep your eye on today, a major options expiry. Yahoo Finance's Jared Blikre joins us from the floor of the New York Stock Exchange to really connect the two and break it all down for us. Jared.
JARED BLIKRE: Yeah. I think the big question in crypto is is there a whale selling right now? It would appear so. Bitcoin has been relatively quiet recently. And let's go to the YFi Interactive and chart the recent price action. Here, we can see Bitcoin down 7.44% over the last 24 hours. And here is a three month chart. And I was standing here yesterday afternoon close to the close, just remarking how it had come down to the bottom of this channel.
And we were looking for a potential rebound that did not happen. There was just a washout all the way down to about $25,000, which happens to be above the three-month low. Let's take a look at the year to date chart. We had what could be considered a bullish flag here, but that is out the window. We just have more choppiness inside this range. And there are a lot of expectations when Bitcoin first headed north of $30,000 and then again thinking, well, we're going to get some continuation to the upside.
But there's just huge overhead supply there. And apparently, it was too much for the market. I will show you the high coincided with this overhead supply-- this giant, giant top right here. So still got some things to work through. And now, the onus is on the bears to prove the case because the bulls apparently have given up a little bit. But one of the things I've been tracking this week, and in fact over the last two weeks, has been the fringier parts of the market, including Bitcoin.
I'm going to go to my leaders page here on the YFi Interactive. You can see for the day, BITO, that's the Bitcoin ETF. That is down the most, followed by Chinese internet ETF, KWEB. But over the last five days, we've seen meme stocks and Bitcoin really be two of the big losers this week. Why is that? I think because August was expected to be and it has turned out to be a relatively bearish month. We're expecting this to go sideways for the next few months. We also have increasing volatility into September and October.
So given the gains that we've seen year to date, we were ripe for this situation. The big question is, what happens next? And that kind of leads me into the next topic you mentioned, which was options expiration. What's going on in the options market? Here, I have the S&P 500. You can see we're in the midst of this 5% correction right now. By the way, that's not even-- well that is more than half of the correction we saw due to the regional bank crisis. That was about 9% or so. And we're just looking at 5% right here.
But you take a look at the VIX. The VIX is picking up. And an analysis by Jefferies out today or yesterday said the pain trade now is decisively to the downside. We saw the Bank of America fund manager survey come out this week, where we saw the least amount of bearishness since February of last year. That was before the Fed kicked off its huge interest rate raising campaign.
And so you put all this together, it looks like the bulls have something to prove in this market. And they really haven't for some time. It's been more or less a glide path on the way up. So for substantial correction in a while, we have OpEx this morning. Index options have expired on the open. And now we're waiting until after the close, those last prints of the day, for individual options to expire. There is a lot of put buying, a lot of protection buying coming into this.
Put-to-call ratios, they soared this week. So so much for those zero days to expiration, that phenomenon, and so much for those calls that everybody was buying before. It's all about protection now, guys.
- I'm sure that's what everyone is enthusiastically talking about behind you on the floor here this morning.
JARED BLIKRE: I have no idea what's going on here but--
- I don't know. People are glad it's Friday. I know I am. Maybe that's what's going on. Jared, thank you so much. Appreciate it.
