Bitcoin pushes to $40K, but are bulls strong enough to win Friday’s $735M options expiry?
Despite a bullish crypto market, the number of Bitcoin options expiring Friday is overwhelming. Bulls will have to make big bets with their positions before they close out on expiration day and trade back into more positive territory.
The “btc options expiry time today” is a question about whether the bulls are strong enough to win Friday’s $735M options expiry. The answer to this question will be explained in detail in the blog post.
The price of Bitcoin (BTC) has been caught in a falling wedge pattern for the last two months, and it has repeatedly challenged the $37,600 support.
BTC is down 16 percent year-to-date, which is in line with the Russell 2000s performance, adding to this “bearish” pricing movement.
FTX has a 1-day chart of Bitcoin/USD. TradingView is the source of this information.
Investors’ fears about deteriorating macroeconomic circumstances are the main driver of Bitcoin’s recent price behavior. Professional investors are concerned about the impact of the US Federal Reserve’s tightening economic policies, and billionaire hedge fund manager Paul Tudor Jones said on May 3 that the environment for investors is worsening faster than ever because the monetary authority is raising interest rates at a time when financial conditions are already deteriorating.
“This will be a comprehensive import embargo on all Russian oil, seaborne and pipeline, crude and processed,” European Commission President Ursula von der Leyen stated.
As a result, traders are becoming more anxious about the effects of a global macroeconomic crisis on cryptocurrency markets. If the world economy enters a downturn, investors will seek safety by avoiding risky asset classes like Bitcoin.
Prices below $40,000 were not expected by bulls.
The open interest in Bitcoin options for the May 6 expiration is $735 million, but the actual total will be lower since bulls were taken off guard when BTC fell below $40,000.
The open interest in bitcoin options for the month of May has reached a new high. CoinGlass is the source of this information.
The $405 million call (buy) open interest against the $330 million put (sell) options results in a 1.22 call-to-put ratio. Nonetheless, with Bitcoin hovering around $39,000, 89 percent of optimistic wagers are likely to be worthless.
Meanwhile, bears will have $100 million worth of put (sell) options if Bitcoin’s price stays below $39,000 on May 6. This discrepancy arises because a right to sell Bitcoin at $36,000 has no value if it trades above that amount upon expiration.
Pre-Fed, BTC price rises 4% as MicroStrategy promises to shield Bitcoin from a $21,000 fall.
On Friday, the Bears may make a $145 million profit.
Based on the present price activity, the four most probable possibilities are shown below. The quantity of call (buy) and put (sell) options contracts available on May 6 vary based on the expiration price. The potential profit is determined by the imbalance favoring either side:
500 calls (buy) vs. 4,300 puts between $37,000 and $39,000 (sell). The overall outcome is $145 million in favor of the bears.
1,200 calls (buy) vs. 2,500 puts between $39,000 and $40,000. (sell). The Bears enjoy a $50 million edge over their opponents.
3,800 calls (buy) vs. 1,100 puts between $40,000 and $41,000 (sell). The net outcome is $105 million in favor of bulls.
5,300 calls (buy) vs. 700 puts between $41,000 and $42,000 (sell). The bulls have increased their profits to $190 million.
This rough estimate takes into account call options in bullish wagers and put options in neutral-to-bearish transactions. Despite this, more complicated investing methods are ignored by this simplicity.
A trader may, for example, have sold a call option to acquire negative exposure to Bitcoin above a certain price, but there’s no straightforward method to evaluate this impact.
To make a $145 million profit, Bitcoin bearish must keep the price below $39,000 on May 6. Bulls, on the other side, may avert a loss by pushing BTC over $40,000, netting them a profit of $100 million. Bears seem to be better positioned for Friday’s expiration, given the gloomy macroeconomic fundamentals.
The author’s views and opinions are solely his or her own and do not necessarily reflect those of Cointelegraph. Every investing and trading decision has some level of risk. When making a choice, you should do your own research.