Crypto Prices Face Triple-Witching Volatility, Bearish Patterns Emerge

The crypto market remains relatively stable as investors shift their focus from the Federal Reserve's recent interest rate decision to the upcoming triple-witching event. This quarterly occurrence, where stock options worth over $4.7 trillion will expire, is a significant event that could influence the prices of major cryptocurrencies such as Bitcoin (BTC), Ripple (XRP), and Ethereum (ETH).

This week has seen several major events that have tested both the stock and crypto markets. The Federal Reserve announced its second interest rate decision of the year, and the SEC concluded its lawsuit against Ripple. Additionally, Donald Trump delivered a pre-recorded speech at a crypto conference. The next critical test for crypto prices will occur on Friday when the triple-witching event takes place. This event, which happens quarterly, involves the expiration of a large volume of options, estimated to be between $4.5 trillion and $4.7 trillion this week. The triple-witching event explains why American stocks have largely erased some of the gains made after the FOMC decision, as more activity related to roll-outs, position closing, and roll-downs occurred. Stocks tend to drop ahead of the triple-witching event, with Dow Jones index futures dropping by 140 points, and those tied to the S&P 500 and Nasdaq 100 falling by 0.50%. The US stock market futures expiry has an impact on cryptocurrencies like BTC, ETH, and XRP because of their close correlation.

There is a risk that the BTC price is on the verge of a bearish breakdown ahead of the triple-witching event. This scenario is emerging because the Bitcoin price has been rising gradually this week, moving from a low of $76,402 this month to $83,890. The recent rebound has led to the formation of a rising wedge pattern, a popular bearish sign made up of two ascending and converging trendlines. With these two lines nearing their confluence, the BTC price will likely have a bearish breakdown to $76,400. The bullish Bitcoin forecast will become invalid if it rises above $89,240, the neckline of the double-top at $108,300.

The ETH price is also at risk of a breakdown because it has formed a bearish flag pattern. This pattern comprises a vertical line and a rectangle pattern and often leads to a strong breakdown. Ethereum price has moved below the key support at $2,120, the neckline of the triple-top pattern at $4,000. These patterns, coupled with the death cross that happened in February, mean that an ETH price crash to $1,500 is possible.

The daily chart shows that the XRP price has lost momentum after the SEC ended the Ripple case. This is a sign that XRP remains at risk of further downside since it has failed to move above $3. Rising above that level is important for the coin to invalidate the head and shoulders pattern that has formed this year. Therefore, there is a risk that the Ripple price will have a bearish breakout.

The $4.7 trillion US stock options expiry, known as triple-witching, is a major event that happens once per quarter. It leads to volatility, which could impact crypto prices, which are now vulnerable after forming bearish patterns. The triple-witching event may lead to more volatility in the stock market, which may in turn, affect crypto prices. That’s because of a close correlation that happens between stocks and crypto. Bitcoin has formed a rising wedge pattern, pointing to a major downward trend after the triple-witching event. Odds are high that XRP and ETH have formed bearish patterns pointing to a strong breakdown in the next few days.