Bitcoin drops below $110,000 before $22 billion options expire

Bitcoin fell below $110,000 on Friday, heading for a sharp weekly loss as the market braced for the expiration of nearly $22 billion in crypto options, while investors remained cautious ahead of key US inflation data.

The world’s largest cryptocurrency dropped 1.8% to trade at $109,552.6 by 02:20 AM ET (06:20 GMT), after earlier slipping below $109,000 — its lowest level in six weeks.

Bitcoin is on track for a weekly decline of more than 5%, with other altcoins also poised for heavy weekly losses.

Bitcoin falls ahead of massive options expiry

The expiry of options contracts scheduled for 08:00 GMT on Friday marks the end of the third quarter, placing downward pressure on Bitcoin and other digital assets.

According to derivatives exchange Deribit, more than $17 billion worth of Bitcoin options were set to expire, with a large portion of open interest concentrated in bullish contracts.

Reports indicate that such large expirations can exacerbate price volatility, especially if key support levels fail to hold.

Earlier in the week, Bitcoin’s slide was attributed to a wave of liquidations in derivatives markets, which erased nearly $1.5 billion from crypto markets. Reports noted that selling intensified as traders maintained directional bets through options contracts that benefit from sharp moves, underscoring the market’s ongoing volatility.

Fed outlook in focus; PCE inflation data awaited

Meanwhile, recent US economic data reduced expectations for aggressive Federal Reserve rate cuts.

Second-quarter GDP growth was revised up to an annualized 3.8% on Thursday, fueling speculation that the central bank may adopt a more cautious stance toward monetary easing.

Investors now await the release of the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, for additional signals on monetary policy direction.

TeraWulf plans $3 billion data center expansion

TeraWulf Inc. (NASDAQ: WULF) plans to raise about $3 billion to finance data center expansion through a financing structure backed by Google (NASDAQ: GOOGL), CFO Patrick Flury told Bloomberg.

The Bloomberg report added that Morgan Stanley is arranging the potential deal for TeraWulf, noting it could be executed via high-yield bond markets or leveraged loans.