A time when major contract expiries happen simultaneously, the next quadruple witching is due on 15 September. How will bitcoin react?
Four times a year what is known as the quadruple witching event takes place, and causes a surge in trading volume as traders balance their portfolios. This can be a signal for a change in bitcoin’s direction.
Quadruple Witching – something arcane?
Contrary to what the name might suggest, the Quadruple Witching has nothing to do with the occult or witchery of any description. It is a name given by traders to an event that happens four times a year when traditionally four different contracts expire at the same time.
The four derivatives contracts are those of index futures, stock futures, index options, and stock options. Given that U.S. single-stock futures haven’t traded since 2020, this is no longer counted, effectively meaning that the event has now become the Triple Witching event, yet is still known as the Quadruple Witching.
Previous Quadruple Witchings
The last Quadruple Witching took place on 16 June, and bitcoin began a major surge around this time, going from around $25,600 to achieve a new local high of nearly $32,000 some three weeks later. Another previous event took place on 16 December, 2022, and for this one there was a dump into the Witching event that was then followed by a sideways trend.
The change in bitcoin’s trend is not necessarily up. The trend can go in any direction from one of the following: up, down, or sideways. The bitcoin price has generally gone sideways for the last 3 weeks, with one spike to the upside at the end of August.
The DXY is important to watch
A very important factor for bitcoin is the U.S. Dollar Index (DXY). The DXY has been climbing steadily since mid-July, going from 99.5 to 104.7 where it is presently residing. This is a level of resistance, and should the dollar break above 105.6 this is not likely to have a positive effect on bitcoin or the crypto market as the dollar could rise to challenge the high last seen at the end of September 2022 of 114.8.
Be that as it may, the bitcoin stochastic RSI on the higher weekly time frame has almost reset, and a cross to the upside could well coincide with the Quadruple Witching event. Crypto Daily will keep its readers up to date as these events unfold.
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.