With the expiration of the $655 million BTC option on Friday, the Bitcoin bulls’ goal is $50,000


Bitcoin (Bitcoin) Failed to break the key psychological barrier of $50,000 on August 23 and retested the $47,000 support level thereafter.If historical data has any impact on the price of Bitcoin, then Poor performance in September 4 of the past 5 years.

Cointelegraph writer and market analyst Michaël van de Poppe recently stated that Ether’s (Ethereum) Breaking through $3,500 may be a leading indicator Bitcoin’s next bull market, And now the trading price of Ether is 3,700 US dollars, traders anxiously await the next move of BTC.

The bulls may be excited about El Salvador’s “Bitcoin Law,” which will take effect on September 7.In addition, the most recent $150 million bitcoin trust fund The approval of the country’s legislative assembly is another potentially bullish development.

The funds will be used to support the installation of government-backed encrypted ATMs and provide incentives to encourage the use of government-backed digital wallet Chivo.

This week Coinbase also saw A large amount of Bitcoin outflows After a period of relative stability. This move brought the exchange’s balance to less than 700,000 BTC, which was last seen in December 2017. These changes are generally considered bullish because they indicate that holders are unlikely to sell Bitcoin in the short term.

Bitcoin Options aggregated the open positions on September 3. Source: Bybt.com

The expiry date on September 3 will be a test of the strength of the bulls, as 93% of the $390 million call (buy) options are placed at $48,000 or higher.

In addition, compared with the $265 million protective put option, these neutral to bullish instruments dominate 48% of the weekly expiration dates.

However, the put option ratio of 1.48 is deceptive, because if the Bitcoin price stays below $48,000 at 8:00 AM UTC on Friday, the bulls’ over-optimism may eliminate most of their bets. After all, if the transaction price of Bitcoin is lower than that price, what are the benefits of buying Bitcoin for $52,000?

The bear was also stunned

78% of put options (the buyer has the right to sell bitcoins at a pre-set price) are priced at $46,000 or less. If Bitcoin goes above that price on Friday morning, these neutral to bearish instruments will become worthless.

The following are the four most likely scenarios considering the current price level. The imbalance in favor of either party represents the potential profit at maturity.

  • Between USD 45,000 and USD 46,000: 140 call options and 1,220 put options. The net result is $48 million in favor of protective bearish (bearish) instruments.
  • Between USD 46,000 and USD 48,000: 590 call options and 735 put options. The end result is a balance between short and long positions.
  • Between USD 48,000 and USD 50,000: 1,930 call options and 120 put options. The end result is $88 million in favor of call (call) options.
  • More than 50,000 USD: 3,310 call options and 0 put options. The end result is that bullish instruments worth $165 million are completely dominant.

The above data shows how many contracts will be available on Friday, depending on the expiration price.

This rough estimate takes into account that call (buy) options are used for bullish strategies, while put (sell) options are only used for neutral to bearish trading. Unfortunately, real life is not that simple, because more complex investment strategies may be being deployed.

For example, a trader could have sold put options, effectively gaining positive exposure to bitcoin above a certain price. Nevertheless, there is no easy way to measure this impact, so the simple analysis above is the best guess.

Incentives for bulls trying to break $50,000 are in place

These two competing forces will show their own strength, and the ears will try to minimize the damage. On the other hand, if the BTC price stays above US$48,000, the bulls can moderate the situation.

The most important test will be the $50,000 level, because the bulls have a great incentive to eliminate every protective put option and gain an advantage of $165 million.

The only hope for the bears lies in some surprising regulatory news flow or the negative results from the US unemployment benefit application data on the price of Bitcoin on September 2.

Although there is still room for further volatility before expiration, the bulls seem to be in a better position.

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