Before the expiration of the $820 million option on Friday, the Bitcoin bulls have a target price above $58,000

Everyone is talking about six-figure Bitcoin (Bitcoin) Price, because the digital asset has broken through several months of downtrend and confirmed that the bullish trend is working.

If Bitcoin happens to enter a parabolic trend of $110,000, it will eventually match PlanB’s stock-to-flow model predictions. According to the pseudonymous analystThe scarcity and valuation of gold and other precious metals, as well as “Elon Musk’s energy FUD and China’s mining crackdown” are several factors that have led to a model inaccuracy rate of 50% or higher in the past five months.

The Bulls’ hopes are mainly focused on Exchange Traded Fund Approved by the US Securities and Exchange Commission. Currently, there are multiple requests pending review between October 18 and November 1, but the regulator may postpone its final decision.

The expiration of the $830 million option on October 15 was largely affected by the 20% price increase that began on October 4, which is likely to eliminate 92% of put (sell) options.

Bitcoin price (in U.S. dollars) on Coinbase. Source: TradingView

The aftermath of China’s crackdown on the mining industry is an important event that may stimulate investor sentiment. Research shows that the United States accounts for 35.4% of Bitcoin’s hash rate.

also, As reported by Cointelegraph, Texas and Ohio in the United States are also expected to acquire more large-scale Bitcoin mining centers, which will effectively push up the U.S. crypto market share.

Expiry on October 8 is good for bulls

Following the estimated net profit of USD 370 million that expired on BTC options last week, the bulls have more firepower, which is evident in the USD 820 million expiration on Friday. This advantage explains why the open interest of call (buy) options is 43% larger than that of neutral puts.

Bitcoin Options aggregates open positions on October 15. Source: Bybt

As shown in the above data, the shorts bet $335 million on Friday’s expiry date, but they seem to be caught off guard, because 92% of put (sell) options may become worthless.

In other words, if Bitcoin stays above $56,000 on October 15th, only $36 million worth of neutral put puts will be activated when they expire at 8:00 AM UTC on Friday.

The bulls have reason to push the BTC price above $58,000

Here are the four most likely scenarios for expiration on October 15. The imbalance in favor of either side represents theoretical profit. In other words, depending on the expiration price, the number of active call (buy) and put (sell) contracts will be different:

  • Between USD 52,000 and USD 54,000: 3,140 call options and 2,110 put options. The net result is $55 million in favor of bullish (bull market) instruments.
  • Between USD 54,000 and USD 56,000: 3,700 calls and 1,240 puts. The net result is $130 million in favor of bullish (bull market) instruments.
  • Between USD 56,000 and USD 58,000: 4,850 call options and 680 put options. The net result is $235 million in favor of bullish (bull market) instruments.
  • More than 58,000 USD: 6,230 call options and 190 put options. The end result is a complete dominance, with the bulls making a profit of $350 million.

The original estimate believed that call options were only used for call bets, and put options were used for neutral to put transactions. However, investors may have used more complex strategies, often involving different maturity dates.

Short positions require a 7% price adjustment to reduce losses

In each case, the bulls have absolute control over the expiry date this Friday, and they have many reasons to keep the price above $56,000. On the other hand, short positions need to fall below $54,000 by 7% to avoid losses of $235 million or more.

Nevertheless, traders must take into account that during a bull market, sellers need to put a lot of effort to put pressure on prices, and it is usually ineffective. The analysis shows that call (buy) options have a considerable advantage, which will drive more call bets next week.

The views and opinions expressed here only represent author It does not necessarily reflect the views of Cointelegraph. Every investment and transaction involves risks. When making a decision, you should conduct your own research.