As Friday’s $600 million BTC option is about to expire, Bitcoin strengthens


In the past 7 days, Bitcoin (Bitcoin) Failed to break the resistance level of 48,000 USD, but even if Minneapolis Federal Reserve Chairman Neel Kashkari criticized the industry, prices remained flat.

At the annual summit of the Pacific Northwest Economic Zone on August 17, Kashkari said:

“What I have seen so far is…95% of fraud, hype, noise and chaos.”

In addition, according to Yahoo FinanceWhen Kashkari mentioned that Bitcoin’s only use case is to fund illegal activities, he specifically targeted Bitcoin.

Even if there is a correction now, Bitcoin investors should be happy with the support of US$44,000, because the Fed also expressed its intention to lift its $120 billion in monthly purchases Treasury bills and mortgage-backed securities.

As stimulus measures to support the market decrease, investors will naturally become more risk-averse, which may cause the price of Bitcoin to fall.

With this in mind, traders should not worry about the expiration of the $600 million bitcoin option on Friday, because it can be interpreted as bullish when the market remains unchanged during the period of potentially negative news.

Bitcoin’s August 20th date is right to summarize open positions. Source: Bybt.com

The call option ratio is currently 1.43, which is in favor of neutral call options. The data reflects the superposition of 7,838 Bitcoin call options and 5,465 put options.

The bulls seem to be confident of the $44,000 support level

Currently, less than 17 hours before expiration on Friday, it is unlikely that the $50,000 call option will be of any use. This means that even if Bitcoin trades at $49,900 at 8:00 AM UTC on August 20, these options become worthless.

Therefore, after excluding the 3,700 ultra-bullish call option contracts above $50,000, the adjusted open interest for neutral to call instruments is $190 million.

The maturity price of less than US$48,000 reduced this figure to US$138 million. If the shorts manage to keep bitcoin trading below $46,000, only $67 million of these call option contracts will expire on Friday.

In the end, the worst-case scenario for a long position occurred below $44,000, because it throws out 83% of neutral call options, leaving only an open position of $24 million to their advantage.

related: Bitcoin fell along with the S&P 500 as the Federal Reserve said it would reduce its monthly bond purchases by $120

Shorts need BTC price below 45,000 USD to balance this situation

The bears seemed surprised because 73% of protective puts were below $44,000. Therefore, if the Bitcoin expiration time is higher than this threshold, the open interest of the instrument will be reduced to 65 million USD, which will give the short position an advantage of 41 million USD.

By keeping the price of Bitcoin below $45,000, the short position may maintain a basic balance of open positions between call options and protective put options.

In the end, an expiry price higher than $46,000 increased the advantage of the bulls to $105 million, which seems to be a good reason to justify increasing buying pressure before expiration on Friday.

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