8.3 C
New York
Tuesday, October 19, 2021

Buy now

Bitcoin gains steam as $ 600 million in Bitcoin options nears expiration

In the last 7 days, Bitcoin (BTC) was unable to overcome the $ 48,000 resistance, but the price remained unchanged even as the chairman of the Federal Reserve Bank of Minneapolis, Neel Kashkari, charged the industry.

During an appearance at the annual Pacific Northwest Economic Region summit on August 17, Kashkari said:

“So far what I’ve seen is … 95% fraud, hype, noise and confusion.”

Also, according to Yahoo Finance, Kashkari specifically attacked Bitcoin when he mentioned that its only use has been to finance illicit activities.

Even with the current pullback, Bitcoin investors should be glad that the $ 44,000 support held. because the Federal Reserve also signaled its intention to cut its monthly purchases of $ 120 billion in US Treasuries.

With less stimulus to help the markets, investors naturally become more risk averse, which could have caused a pullback in the price of Bitcoin.

Taking this into account, Traders should be less concerned about the expiration of $ 600 million in Bitcoin options on Friday, as when the markets resist potentially negative news, it can be interpreted as something bullish.

Added open interest in Bitcoin options for August 20. Source: Bybt.com

The call and put option ratio currently stands at 1.43 and favors call options from neutral to bullish. This data reflects the 7,838 stacked Bitcoin call option contracts versus the 5,465 put options.

The bulls appear to be confident of the $ 44,000 support

Currently, there is less than 17 hours to expiration on Friday, and there is a slim chance that a $ 50,000 call option could do any good. This means that even if Bitcoin is trading at $ 49,900 at 8:00 am UTC on August 20, these options will be worthless.

Therefore, by leaving sides For the 3,700 ultra-bullish call option contracts above $ 50,000, the adjusted open interest for instruments from neutral to bullish stands at $ 190 million.

A maturity price below $ 48,000 reduces this figure to $ 138 million. If the bears manage to keep Bitcoin trading below $ 46,000, only $ 67 million in these call option contracts will participate in Friday’s expiration.

Finally, the worst-case scenario for the bulls appears below $ 44,000, as it removes 83% of the neutral-to-bull call options to leave a meager $ 24 million open interest in its favor.

The bears need the price of BTC to be below $ 45,000 to balance the situation

The bears appear to have been caught off guard because 73% of protective put options were opened below $ 44,000. Consequently, the instrument’s open interest would drop to $ 65 million if Bitcoin options expire above that threshold, giving bears a $ 41 million advantage.

By keeping the price of Bitcoin below $ 45,000, the bears could keep the open interest practically balanced between the call options and the protective put options.

As a last resort, a expiration price above $ 46,000 increases the bulls’ lead to $ 105 million, which seems like reason enough to justify more buying pressure heading into Friday’s expiration.

The views and opinions expressed here are solely those of the Author and do not necessarily reflect the views of Cointelegraph.com. Every investment and business move involves risks, you must do your own research when making a decision.

Keep reading:

Tammy Sewell is our Writer and Social at OICanadian.com. Tammy loves sports, she writes our celebrities news. She spends time browsing through several celebs news sources as well the Instagram. Email: Tammy@oicanadian.com Phone: +1 513-209-1700

Related Articles


Please enter your comment!
Please enter your name here

Stay Connected


Latest Articles