Bitcoin bulls target prices above $ 58,000 ahead of Friday’s $ 820 million options expiration


Everyone is talking about a six-digit Bitcoin (BTC) price now that the digital asset has broken out of its multi-month downtrend and has confirmed that an uptrend is in play.

If Bitcoin goes into a parabolic move towards $ 110,000, that would finally match the prediction of PlanB’s Stock-to-Flow model. According to the pseudonymous analyst, the scarcity and valuation of gold and other precious metals and “Elon Musk’s energy FUD and China’s mining crackdown” are some of the factors responsible for the past five months. ‘50% or more inaccuracy in the model.

The hopes of the bulls hang mostly on a exchange-traded fund pending approval by the United States Securities and Exchange Commission. Currently, several applications are pending review between October 18 and November 1, but the regulator could postpone its final decision.

The expiration of the $ 830 million options on October 15 was largely affected by the 20% price hike initiated on October 4, which most likely wiped out 92% of the put (put) options.

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Bitcoin price on Coinbase in USD. Source: TradingView

The aftermath of the mining crackdown in China was a significant event that could have fueled investor sentiment, and research shows the United States accounts for 35.4% of the Bitcoin hash rate.

In addition, as TNZT reported, the US states of Texas and Ohio are also expected to receive large-scale Bitcoin mining centers, which will further increase the US crypto market share.

The October 8 expiration was profitable for the bulls

After last week’s estimated $ 370 million net profit from the expiration of BTC options, the Bulls had more firepower, and this is evident in this Friday’s $ 820 million expiration. This advantage explains why the open interest of calls (calls) is 43% higher than neutral to bearish puts.

Bitcoin options accumulate open interest for October 15. Source: Bybt

As the data above shows, the Bears have placed $ 335 million in bets for Friday’s expiration, but it looks like they’ve been taken by surprise as 92% of put (put) options are at risk of falling. become worthless.

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In other words, if Bitcoin stays above $ 56,000 on October 15, only $ 36 million neutral to bearish put options will be activated at 8:00 a.m. UTC on Friday.

Bulls have reason to push BTC price above $ 58,000

Below are the four most likely scenarios for the October 15 expiration. The imbalance in favor of each side represents the theoretical profit. In other words, depending on the expiration price, the amount of buy (buy) and sell (sell) contracts that become active varies:

  • Between $ 52,000 and $ 54,000: 3,140 calls against 2,110 put options. The net result is $ 55 million in favor of call instruments (bull).
  • Between $ 54,000 and $ 56,000: 3,700 calls against 1,240 put options. The net result is 130 million dollars in favor of call instruments (bull).
  • Between $ 56,000 and $ 58,000: 4,850 calls against 680 put options. The net result is 235 million dollars in favor of call instruments (bull).
  • Above $ 58,000: 6,230 calls against 190 put options. The net result is complete dominance, with the bulls profiting from $ 350 million.
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This rough estimate considers call options used exclusively in bullish bets and puts in neutral to bearish trades. However, investors may have used a more complex strategy which usually involves different expiration dates.

Bears need 7% price correction to reduce their loss

In all scenarios, the bulls have absolute control over this Friday’s expiration, and there are a handful of reasons they keep the price above $ 56,000. On the other hand, bears need a 7% negative move below $ 54,000 to avoid a loss of $ 235 million or more.

Nonetheless, traders should consider that during bull runs the amount of effort a seller needs to put pressure on the price is immense and generally ineffective. The analyzes indicate a huge advantage of call (buy) options, fueling even more bullish bets next week.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of TNZT. Every investment and trade move involves risk. You should do your own research before making a decision.