Between August 15 and August 19, the Bitcoin market witnessed a 16.5% correction as it attempted the $20,800 support. In actuality, a $4,050 price difference is quite modest, particularly when Bitcoin’s 72% yearly volatility is taken into consideration.

Currently, the S&P 500’s volatility is at 31%, which is much lower, yet between June 8 and June 13, the index traded down 9.1%. So, according to the historical risk measure, the index of significant U.S.-listed corporations had a more sudden change.

The attitude of crypto investors deteriorated at the start of this week after China’s central bank lowered its prime rate for five-year loans on August 21 in response to deteriorating circumstances in the Chinese real estate market. In addition, a strategist at Goldman Sachs investment bank claimed that inflationary pressure will push the U.S. Federal Reserve to tighten the economy more, which would have a negative effect on the S&P 500.

Regardless of the present 80/100 connection between equities and Bitcoin, investors often seek refuge in the U.S. dollar and inflation-protected bonds when they anticipate a crisis or market catastrophe. This phenomenon is known as a “flight to quality” and has the tendency to increase selling pressure on all risk markets, including cryptocurrency.

Bitcoin has been unable to break through the $20,800 support despite the bears’ best attempts. This trend explains why the expiration of monthly options on Bitcoin worth $1 billion on August 26 might favor bulls despite the recent 16.5% decline in five days.

Bitcoin bulls must drive the price over $22,000 on August 26 in order to prevent a probable loss of $140 million. However, Bitcoin bulls liquidated $210 million worth of leveraged long futures options on August 18, so they are less likely to drive the price higher in the near future.

Consequently, the most likely scenario for August 26 is a price range between $22,000 and $24,000 which provides a balanced conclusion between bulls and bears.

If bears exhibit power and BTC falls below the crucial $20,800 support level, the $140 million loss in the monthly expiration would be the least of their worries. In addition, the move would invalidate the previous bottom of $20,800 on July 26, so halting a seven-week-long upward trend.