Bitcoin (BTC) briefly crossed the $70,000 mark on Monday morning before dumping to $66,000, but analysts at the crypto exchange Bitfinex say the leading digital asset may pull back even more in the coming days.

According to the latest Bitfinex Alpha report, bitcoin’s possible decline may be caused by significant downward pressure on implied volatility in the options market.

The State of Bitcoin’s Options Market

After United States President Joe Biden dropped out of the 2024 presidential race a week ago, volatility returned to the crypto market, with implied volatility in BTC options contracts surging to a four-month high of 68.6%

As the weekend approached and the market buzzed with anticipation of former President Donald Trump and presidential candidate Robert F. Kennedy’s speeches at the Bitcoin 2024 Nashville conference, implied volatility fell. Bitfinex attributed this decline to traders de-risking and closing their positions ahead of the event.

Although BTC briefly fell below the $64,000 range, it continued its upward trajectory and maintained a bullish momentum for a few days. The asset has faced strong resistance at the $68,000 to $69,000 region and withstood a 7.24% intra-week decline.

BTC finally surged past $69,000 on July 29 to mark a new 7-week peak but retraced hard in the following hours. Bitfinex expects the $68,000 to $69,000 level to continue to act as resistance and that BTC may remain below those lines.

BTC May Stall or Pull Back

During the Bitcoin conference over the weekend, the market witnessed a short spike in realized volatility; however, implied volatility continued to plunge. Bitfinex said such movements are usually seen before an options expiry, especially if no significant impending events or catalysts exist.

Analysts found that 61,000 BTC options expired on Friday, with a Put Call Ratio of 0.62 and a notional value of $3.1 billion. This indicates significant activity in the options market driven by the de-risking of short-dated calls and puts as short-term price catalysts like the Ethereum exchange-traded fund launch and the Nashville conference passed.

“Looking ahead, the market will continue to digest news from Nashville, and adjust as the monthly expiry takes place at the end of the week. We expect potential further downward pressure on implied volatility,” Bitfinex analysts said.

With implied volatility still on the decline, BTC will most likely stall or pull back even more from the $68,000-$69,000 resistance zone.