Cryptocurrencies rose during yesterday's trading session, with Bitcoin trading above the $61,500 level, as market sentiment improved after Micron Technology's forecasts reaffirmed the strength of the artificial intelligence market.
The advance follows Bitcoin's drop below $60,000 on Wednesday, when it recorded its lowest level in 20 months amid a sell-off in technology sector stocks that dampened appetite for high-risk assets.
The world's largest cryptocurrency by value could face further pressure as options contracts worth approximately $10 billion are set to expire.
Bitcoin rose to $61,680, gaining 3%, while Ethereum climbed to $1,651.77, up 5%, and Ripple advanced to $1.0818, rising 0.86%.
Bitcoin is facing the expiry of a large volume of options contracts, which could compound pressure on a market already suffering from weak institutional demand and macroeconomic headwinds.
Options contracts on Bitcoin with a notional value of approximately $10 billion are scheduled to expire on Deribit — the largest cryptocurrency options trading platform — at 4:00 p.m. Singapore time this Friday.
Since most of these contracts are bullish bets, and given the current decline in Bitcoin's price, traders may be inclined to take defensive positions or adopt more bearish outlooks.
Bitcoin continues to struggle to regain its momentum since the market crash on 10 October, and has fallen more than 50% from its all-time high.
Furthermore, the underlying market environment has deteriorated beyond derivatives market volatility. US-listed Bitcoin exchange-traded funds have recorded $3 billion in outflows since the start of June, according to data compiled by Bloomberg.