Friday was a nerve-wracking day for Bitcoin traders who were waiting for greater clarity on two important price triggers: the Fed’s tapering of the easy money policy and a $2 billion options expiry. Fortunately for them, BTC reacted quite well to the changes and has rebounded more than 5% in value in the last 24 hours.
Data from TradingView indicates that Bitcoin was trading at around $47,000 during yesterday’s options expiry. Speculators were expecting the currency to undergo a price shift towards either side before the event.
Meanwhile, crypto commentator Michael van de Poppe maintained that if BTC declined below the $47K support, it could test the $44,000 floor. He had previously said that $51,000 was a “critical resistance zone” and potential support for the token lies in the $44,000-$42,500 zone.
Altogether, Bitcoin failed to reclaim its recent high of $50,000 before the expiry, but price activity reflected stability. It is normal for such events to stoke fear among traders, but those sentiments rarely materialize into actual selling pressure.
Notably, open interest for Friday’s expiry totaled $9.19 billion, which is the highest in the last three months.
Aside from the options expiry, the crypto community was looking forward to Fed chair Jerome Powell’s address at the Jackson Hole event for any clues on tapering. The Federal Reserve had been buying $120 billion worth of mortgages and bonds during the pandemic to keep the interest rates low and encourage spending.
Powell said on Friday that the bank would finally scale back its asset purchase program by the end of this year. He also signaled that the institution does not plan on raising the benchmark short-term rate, which has been kept near zero since March 2020.
So far, Bitcoin has responded well to both the major developments. At the time of writing, the pioneer cryptocurrency was changing hands at $49,200, representing a recovery from recent losses.