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Bitcoin Bull Market Relies on Expiration of Options Worth $13.8 Billion

Bitcoin By
This Bitcoin Investor Turned $7800 Into $1 Billion: Can You
This Bitcoin Investor Turned $7800 Into $1 Billion: Can You

Takeaways from the conference:

  • Bitcoin Bears have strong incentives to sell below $114,000 and this will likely increase the pressure before expiration.

  • AI spending worries add to the turbulence, and investors are more risk-averse.

Bitcoin, worth $13.8 billion (BTCThe expiration of ) options on August 29 will determine, according to many traders, whether or not the 9.7% recent correction is the beginning of the end for Bitcoin’s bull-run. Bitcoin reached its lowest level in six-weeks on Thursday, when it dropped to $112,000. This increased the momentum of bearishness ahead of August 29th, which is when monthly option expiry will take place.

Bullish Bitcoin Strategies ill-prepared for Bitcoin prices under $114,000

Call (buy) option open interest is $7.44 Billion, which is 17% more than put (sell). The actual result will depend on the Bitcoin price on August 29 at 8 am UTC. Deribit has an 85% market share followed by CME with 7% and OKX at 3%.

Some bulls were overconfident, as some bets reached $125,000 and higher. After Bitcoin’s fall, this optimism was quickly lost and the momentum shifted to put instruments. No matter what the reason for the recent BTC market correction was, those who chose to use bullish strategies are likely to be disappointed.

Deribit open options for BTC on Aug. 29. Source: Deribit

Only 12 % of call options Most of the puts were at or below $115,000, which leaves them out of money at present levels. Contrastingly, 21% are put at $115,000 and higher with clusters of significant puts at $112,000. Therefore, it’s only natural for bears to keep pushing down the price of Bitcoin ahead of monthly expiration.

It may be premature to call bullish option strategies a total loss. Investors will closely monitor comments made by US Federal Reserve chair Jerome Powell Friday. odds of rate cuts Could support asset values. The US unemployment claims numbers on Thursday were higher than expected, adding to the macroeconomic uncertainty.

Related: Why is Bitcoin crashing and will $112K be the final bottom?

Bitcoin could be influenced by the US Federal Reserve, tech stocks and stock prices

Here are five possible scenarios based on the current prices at Deribit. The results are based on theoretical profit estimates based upon open interest imbalances, but do not include complex strategies such as the sale of put options in order to increase price exposure.

  • The difference between $105,000 and $110,000 is: Buy $210 Million in Calls and sell $2.66 Billion in Puts. The put instruments are $2.45 billion ahead in the net.

  • The range between $110100 and $114,000 is: The put side of the equation is $1.5 billion more favorable than $420 million.

  • From $114.100 to $116,000 795 million call vs. 1.15 billion puts, with the puts winning by 360 million.

  • The range between $116.100 and $118,000 is: The calls won by 460 millions dollars.

  • The range between $118.100 and $120,000 is: The calls are $1.1bn to $560m, a difference of $1.1bn.

Bitcoin must trade at or above $116,000 before August 29. But the biggest battle will be fought at $114,000 – where most bears want to lower prices. 

Bitcoin’s fate will ultimately be determined by macroeconomic trends and investors’ dissatisfaction with Bitcoin. artificial intelligence sector. Morgan Stanley: Deepening concerns warned The soaring costs of major technology firms could make it difficult for them to finance share buybacks. This would increase caution on the equity market.

The information contained in this article is meant to provide general knowledge and not as investment or legal advice. This article is solely for informational purposes. It does not represent or reflect Cointelegraph’s views.