The key takeaways
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The bearish option strategies are still in the lead unless Bitcoin reaches a significant price break above $90,00,000.
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The traders are using the $100,000 Call (Buy) Options as income instruments rather than placing direct bets on an enormous Bitcoin rally.
BitcoinBTCIt has bounced back multiple times in the last 2 months from its $87,000 low, but investors remain skeptical of a breakout to $95,000. The expiration of $10.8 billion in BTC options on Friday is a crucial moment for bulls. call (buy) options dominate overall market interest.
This does not mean that bulls have the upper hand. Deribit, as usual, maintains its comfortable market lead with a share of 78.7%, followed by OKX, at 6.3%. Chicago Mercantile Exchange, or CME, is third with a 5% market share.
Deribit’s Jan. 30, call options are valued at less than $92,500 for less than 17 percent of them. Further, since Bitcoin’s low price for the past two months is $84,000, call options priced at $70,000 or less are likely to be used in complex onchain strategy rather than simple price increases. For most traders, purchasing a call at a 20% discount to current levels of the market is an expensive proposition.
As an example, the current price of a BTC $70,000 call option expiring on February 27, currently stands at $0.212 BTC. That is significantly more than the $80,000 BTC call options, trading at $0.0109 BTC. The price difference explains why bulls prefer to buy options at or just above spot prices. BTC calls at or above $110,000 are generally ignored, since their price is less than 0.002 BTC, which equals about $180.
Bitcoin Options Strategies Favored Below $90,000.
Call options of at least $100,000 can account for a large portion. covered call strategies. This setup is similar to receiving interest from a bond. It differs from traditional fixed income products in that the seller still retains ownership of the Bitcoin itself, despite the fact their profit potential is limited. These indicators are not always purely positive.
Deribit’s call options between $75,000-$92,000 amount to $850,000,000. In order to determine whether bulls will be better-positioned at Friday’s deadline, it is necessary to compare the way put options have been stacked. One primary indicator of the market is how many put options are priced at less than $70,000 and costing under $300.
Deribit has $1.2billion in put options that range between $86,000-100,000 despite the fact they are less common than call options. If we accept that put options between $86,000 and $100,000 do not gain from a drop in price, then the total value of these instruments is $1.2 billion. bearish strategies It appears that you are better prepared for January’s expiration.
Related: Bitcoin’s real ‘Uptober’ moment might start in February–Here’s why
Here are the three most likely outcomes for Deribit’s BTC expiry on Friday based upon current prices:
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From $86,000 to $88,000 Net result: $775 Million in favor of the sell (put) instruments.
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From $88,001 to $90,000. This net result is $325,000,000 in favor of the sell (put) instruments.
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From $90,001 to $92,000 A net of $220 millions favors call (buying) instruments.
The mathematical advantage of bearish strategies continues as long the Bitcoin price is below $90,000
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Source: cointelegraph.com
