Will Bitcoin Rally When Record $6 Billion Options Expire This Friday?
Last Updated on 24 March 2021 by CryptoTips.eu
Classic finance is still influencing classic media in a way that the crypto world can only dream of. Our colleagues over at City AM, the London City’s newspaper par excellence, headlined yesterday that Bitcoin’s $60,000 level now feels like a distant memory, probably hoping to push investors back to bonds and stocks.
They seem to be forgetting about the Bitcoin options market though, which is set to expire on Friday 26 March. Back in January, when the options expired, Bitcoin crossed from $40k to $50k (also thanks to the help of Elon Musk’s announcement that Tesla would be investing directly).
Slight difference is that back in January some $4 billion in Bitcoin options contracts were about to expire. This time round, on Friday 26 March, it’s a tad more than that, a good 50% more in fact. At an average price of $60k, there’s about 100,000 Bitcoin options contracts set to expire, or some $6 billion, a record figure.
What will whales do?
Puts versus calls
The expiry data suggests a bullish outlook
Says Pankaj Balani, the chief executive of the Singapore-based Delta Bitcoin exchange.
According to the latest data from https://t.co/OiMrtD9yod, #Bitcoin Futures Open Interest on @DeribitExchange set new ATH of $1.6B🚀 #Deribit prepares for historic $5.7 billion worth of bitcoin options expiry next week.
— CryptoRank Platform (@CryptoRank_io) March 19, 2021
👉 https://t.co/76eQcZd6KN pic.twitter.com/6usY6gh82j
Pankaj continued explaining that:
There is a higher open interest build up on puts than on calls, as options writers remain more comfortable selling the downside than writing the upside.
On the downside, the highest buildup is on $40,000 strike puts for the March expiry. $40,000 also remains the most sold strike for the June expiry and for longer maturities.
He could be right, as data from cryptocurrency analytics provider Bybt suggests that traders are seeing more interest in “call options” (betting that the price of Bitcoin will rise in the future) than in “put options” (betting that the price of Bitcoin will fall in the future).
#Bitcoin Let's see how it flips 57k. Count many factors, macro, end of March options expiry, stimmies etc > 64k is probable next ATH. https://t.co/OYxUr9nKB9
— Fomocap trades (@Workedia) March 16, 2021
City AM said yesterday that it may be some time before Bitcoin gets back to the glory days of $60,000. They may be right of course or it could just be two more days.
sinenkiy / Depositphotos.com