Bitcoin worth 2 billion USD (Bitcoin) The option will expire on Friday, August 27th. Some analysts believe that the strong call (buy) option purchase activity on August 22 may be the catalyst for the recent $50,000 price test.
Digital asset trading company QCP Capital Mentioned In its market update, the entity “has been pushing up (options) prices in the past few weeks.” The activity took place during the Asian morning trading hours, and call options were bought in units of 100 BTC contracts.
The report also mentions the exhaustion of recent regulatory issues, as the Senate Banking Committee and regulatory agencies’ decisions related to cryptocurrencies are unlikely to be fruitful in 2021.
The bear market may be analyzing different data
However, the latest “The Week On Chain” report from the blockchain analysis provider Glassnode contains some relevant data from activities on the Bitcoin chain. This analysis found that Entity-adjusted transaction amount There is no response to continued bullish action.
In addition, crypto market intelligence provider Decentrader emphasized Insufficient trading volume In the recent move to push the price of BTC above $52,000.
Friday will be an important test for the USD 50,000 level, as 4,372 BTC option contracts are waiting for a decision of USD 218 million.
The initial bullish and bearish analysis showed the huge dominance of neutral bullish bullish bullish instruments, with a 60% increase in open interest. Nevertheless, the bulls may be overly optimistic, as 68% of their bets are at $50,000 or higher.
91% of put options may be worthless at expiration
On the other hand, 91% of protective put options are placed at $46,000 or less. If Bitcoin trades at a price higher than that on Friday, these neutral to bearish instruments will become worthless. The option expiration time is 8:00 AM UTC, so some additional volatility is expected before the event occurs.
Considering the current price level, the following are the four most likely scenarios. Considering that call (buy) options are more commonly used for bullish strategies, and protective put options are used for neutral to put transactions, the imbalance in favor of either party represents the potential profit at maturity.
- Less than 45,000 USD: 4,040 call options and 2,500 put options. The end result is a $69 million advantage for a neutral to bullish instrument.
- More than 46,000 USD: 6,500 call options and 1,300 put options. The net result is $239 million, which is in favor of a neutral to bullish instrument.
- More than 48,000 USD: 7,400 call options and 420 put options. The end result is a $335 million advantage for a neutral to bullish instrument.
- More than 50,000 USD: 12,000 call options and 35 put options. The end result is a $600 million advantage for a neutral to bullish instrument.
The above data shows how many contracts will be available on Friday, depending on the expiration price. There is no way to measure the net result of each market participant, because some investors may trade more complex strategies, including market-neutral strategies that use both call options and protective put options.
These two competing forces will show their strength, because the bear will try to minimize the damage. Either way, the bulls have full control of the expiration date on Friday, and there seems to be enough motivation to defend the $48,000 level, and even try to make greater gains by pushing the price above $50,000.
At the same time, bears should focus on the September expiration date, although remember El Salvador is expected to launch Bitcoin As legal tender next month. In addition, the country is building infrastructure to support a Bitcoin wallet issued by a country called Chivo.
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.