The Bitcoin (BTC) price has so far been rejected from the key $117,500 horizontal resistance level. With a ‘triple witching’ options expiry due on Friday, could Bitcoin drop to much lower levels? Triple witching event - $5.3 trillion options expiry In traditional finance, triple witching is the name given to the quarterly event where stock options, stock index futures, and stock index options all expire on the same day. This particular witching event is due to be a record-breaker, with more than $5.3 trillion in options expiring. Given the sheer size of Friday’s expiration, trading volume is likely to spike, leading to huge volatility, and there is a chance that some kind of sell-off could take place in US markets. With Bitcoin probably feeling any sizable downward moves in traditional financial markets, its recent rejection from the major $117,500 resistance could turn into a steeper downside move. All this is without even discussing the crypto market’s own options expiry. While this expiration is ‘only’ a notional $3.4 billion, it could also cause a sharp drop in the Bitcoin price . Max pain is around the $112,000 level. Critical rejection for Bitcoin? Source: TradingView The short-term time frame chart for $BTC shows that while the price is being rejected, at least so far, the rejection has not been definitive. Instead of a general 45 degree angle correction, the price has chosen to drift sideways, perhaps suggesting that there could even be another attempt at the critical overhead resistance. If the price does continue down, a strong area of support would be the bottom of the ascending channel, plus the $115,700 horizontal support level. If this does not hold, the $112,000 support level could even be a possible target. Looking at the bottom of the chart, both the Stochastic RSI indicators, and the RSI indicator are trending down, while the price action is trending up - a classic case of bearish divergence. A good reason for an eventual fall in the Bitcoin price . A positive daily chart Source: TradingView The daily chart is still favouring the bulls at this point in time. The price is holding support above the 50-day SMA and is well above the strong $115,700 horizontal support level. An inverse head and shoulders is still very much in play, the measured move for which would potentially take the price close to the $120,000 resistance. The Stochastic RSI is showing its indicators to be nicely at the top of their range, while the RSI indicator is not only just above the 60.00 support level, but has also broken above the downtrend line. Bitcoin taps critical resistance again - when will it break? Source: TradingView The 2-week chart for the $BTC price illustrates how critical the $117,500 resistance is. This is the 6th tap on this particular pane of glass from a 2-week candle. The more one taps on the glass, the weaker it gets. This does not look like a typical market top. Most market tops would have some kind of a spike which would leave a long candle wick to the upside. All this said, it just may be that the bears could hang on to this resistance a bit longer. Although, even if the price came all the way back down to $108,000, there is very strong support there to send it back up again. One way or another, the odds are that this critical resistance will eventually break, whether that is over the next week or so, or whether it could take a bit longer, no one knows. Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
