Bitcoin bears dominate in Friday’s $2.1B BTC option expiration, leading $585M

A total of 53,400 bitcoins (Bitcoin) The option will expire on Friday, May 28. At first glance, the bulls seem to be leading, because the $2.1 billion open interest ratio of buy (buy) sell (sell) options is 1.32, which favors neutral to bullish derivatives.

However, after Bitcoin fell by 33% in May, the right to buy BTC at a price of $46,000 and above is actually worthless because it is less than 38 hours before expiration.

Coinbase’s Bitcoin price, U.S. dollars. Source: TradingView

On May 20th, Cointelegraph reported “The open interest on May 28 was $1.95 billion, which would not make any difference. It seems premature, but given that there are few call options of $38,000 or less next week, short positions may continue to put pressure on the market.”

After a brief retreat above US$42,000 on May 20, the Chinese government issued a statement stating “Crack down on Bitcoin mining and trading, And resolutely prevent the transmission of personal risks. “

May 23, According to reports, Huobi Exchange has suspended futures trading It caused further damage in mainland China and pushed Bitcoin to below $32,000.

After the expiration of the previous cycle rights, the shorts gained an advantage

As expected, the bears still have the advantage of last week and are still able to fix the Bitcoin price below $42,000. For call options that go from neutral to bullish, rolling the losing position to next week does not yield much, so the bulls will face a difficult battle before they expire on May 28.

Last week’s maturity yield provided room for shorts to further bet that the price of Bitcoin stays at or below $45,000.

Bitcoin options accumulated open positions on May 28.Source: Bibert

Note that there are only 2,550 BTC call options with a price of $42,000 or less, which is only 8% of the outstanding options. This concept is equivalent to an open position of $100 million. As mentioned earlier, call (buy) options of $46,000 and above are worthless.

At the same time, the shorts hit another home run, because most bets are set at $36,000 or higher. The 17,600 BTC put (sell) option above this level represents an open interest of US$685 million, giving neutral to bear market derivatives an advantage of US$585 million.

It is worth noting that the regular spot trading volume of BTC exceeds US$10 billion per day. However, the fact that futures and options expire at the same time will exacerbate volatility.

Remember, buyers and sellers of futures contracts are matched at all times. Therefore, trying to predict which side will exert more pressure is futile.

The expiration time of Deribit, OKEx and is 8:00 AM UTC on May 28th. CME futures and options occur at 3:00 pm UTC.

The views and opinions expressed here are only Author Does not necessarily reflect the views of Cointelegraph. Every investment and trading action involves risks. When making a decision, you should conduct your own research.