Bitcoin (BTC) investors are preparing to expire monthly options of $ 16.5 billion on March 28. However, if the BTC decreases to less than $ 90,000, the actual market impact is expected to be more limited because investors block the guards and invalidate many strong positions.
This change provides an important opportunity for Bitcoin to avoid potential $ 3 billion losses, which can greatly affect market epidemiology in the next few weeks.
Bitcoin options will reveal their interest in USD on March 28. Source: LAevitas.ch
The total open interest on the current currency option is $ 10 billion, while the PUT (SELL) option is $ 6 billion. However, the phone’s $ 7.6 billion is set to more than $ 92,000, and Bitcoin means that it requires 6.4%of the current price to enable the expiration of March 28. As a result, the benefits of strong betting have been greatly weakened.
Bitcoin bulls are sometimes for “separation” when QE starts again.
Some analysts increase the risk of economic recession due to the World Target War and US government spending, which are undergoing weak achievements of Bitcoin. Traders are particularly worried about slow growth in the AI sector, which led the record before the S & P 500 fell 7%on February 19.
S & P 500 Future (left) vs. bitcoin/USD (right). Source: TradingView / COINTELEGRAPH
Bitcoin Bull, meanwhile, hopes to be separated from the stock market, despite the 40 -day correlation since early March. Their optimism comes from the expansion of the monetary base by the central bank and the increase in bitcoin adoption of companies such as Gamestop (GME), Rumble (Rumble), Metaplanet (TYO: 3350) and Semler Scientific (SMLR).
As the option expiration date gets closer, the bull and bears have a powerful incentive that can affect Bitcoin’s spot price. But optimistic investors aim for more than $ 92,000, but optimism alone is not enough for BTC to surpass this score. Deribit leads the option market with a 74%share, 8.5%for the Chicago Merchants Exchange (CME) and 8%for Binance.
Given the current market epidemiology, Bitcoin Bulls offers strategic advantages with monthly expiration of monthly options. For example, if Bitcoin remains at $ 86,500 at 8:00 am on March 28, only $ 2 billion in PUT (Sell) options will work. This situation will encourage Bears to drive Bitcoin to less than $ 84,000, increasing the value of the Active PUT option to $ 2.6 billion.
relevant: If Gamestop purchases Bitcoin, will the BTC price help reach $ 200k?
If the BTC price passes $ 90,000, Bitcoin Bulls will take advantage.
The following are five scenarios based on the current price trend. These results estimate theoretical interests based on public profit imbalances, but exclude complex strategies, such as selling foot options to obtain upward exposure.
$ 81,000 to $ 85,000: $ 2.7 billion call (purchase) vs. PUTS (SELL) $ 2.6 billion. Pure results prefer $ 100 million in call instruments.
$ 85,000 to $ 88,000: $ 3.3 billion call vs. I prefer $ 2 billion or $ 1.3 billion.
$ 88,000 to $ 90,000: $ 3.4 billion call vs. $ 1.8 billion. I prefer $ 1.6 billion in calls.
$ 90,000 to $ 92,000: $ 4.4 billion call vs. I prefer $ 1.4 billion and $ 3 billion.
To minimize the loss, the bear must push Bitcoin to less than $ 84,000 (3%) before it expires on March 28. This movement enhances the position by increasing the value of the PUT (SELL) options.
On the contrary, Bulls can drive the BTC to more than $ 90,000 to maximize profits, especially if it is introduced into the Spot Bitcoin Exchange-Traded Funds (ETF), which can create a strong momentum to set the strong trend in April.
This article is for general information purposes and should not be considered legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.