Main takeout:
97%of the $ 8.3 billion of the Bitcoin putt option is useless for $ 102,000 BTC.
More than $ 105,000 of the paragraph can cause Bitcoin Price Rally to a new high.
Bitcoin (BTC) surged to more than $ 101,000 on May 8, reaching the highest level for three months. 4.6% daily BTC prices have triggered $ 220 million by liquidation of the weak future status and eroded the value of almost all foot (sales) options. Traders are now wondering if Bitcoin is ready to release $ 109,354 in the short term.
Interest in total bitcoin putting (SELL) options for the next three months is $ 8.3 billion, but 97%of which will be deployed at less than $ 101,000. Nevertheless, this does not mean that all foot option traders are betting in the shortcomings of Bitcoin. Some may have sold the device and benefited from the price gain.
One of the biggest options strategies traded on Debibit is “Bull Put Spread”, which sells foot options and purchases other foots with other strikes to capture both the maximum profit and downward risk. For example, merchants who are aiming for profits at higher prices can sell $ 100,000 and buy $ 95,000.
Cryptocurrency traders are famous for their exaggerated optimism, which is reflected in the main strategies of the Debit’s options market, such as “Bull Call Spred” and “Bull Diagonal Spread”. In both cases, traders expect Bitcoin prices to be the same or rising than the abandoned options.
$ 100,000 Bitcoin can improve the strong options, but shorts can resist.
If Bitcoin maintains $ 100,000, most optimistic strategies will produce positive results in the expiration of options in May and June, providing additional incentives for the traders to support upward momentum. However, the seller, which uses the futures market, is likely to be influential to prevent the new Bitcoin at an all -time high.
relevant: Coinbase obtains the optional trading platform Deribit for $ 2.9B
The total interest on Bitcoin futures is currently $ 69 billion, indicating significant demand for short (sales) positions. At the same time, higher prices can force bears to close their position. However, this “short cover” effect means that the merchants are not especially sensitive to the fluctuation of Bitcoin prices because they are greatly muted in the completely hedged position.
For example, you can buy the Spot Bitcoin position using the same margin or spot exchange transaction fund (ETF) while selling the same in BTC futures. This strategy, known as “Carrie Trade,” is a delta neutrality, so it is profitable regardless of price change regardless of the monthly Bitcoin futures trading to compensate for a longer settlement period for monthly bitcoin futures.
Bitcoin Future Premium has been less than 8% in the last three months, so incentives for “transport transactions” have been limited. Therefore, if bitcoin soars to $ 105,000 or more, some forms of “short covers” are likely to occur, greatly improving the new highest chance in the next few months.
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.