As of Friday, June 11, a total of $565 million in bitcoin (B T c) options are ready to expire. This is significant as the past few weeks have been largely deceiving for the bulls. Eventually, the price struggled to maintain the $33,000 support.
However, an unexpected bullish turn of events led to a rise of 18.5% from a low of $31,000 on June 8 to $38,491 today. This strong move saved the bulls as any level below $34,000 would have wiped out 98% of existing call (buy) options.
Who saved the day?
First, MicroStrategy, a publicly traded company with over $3.2 billion worth of bitcoin, Closes $500 million bond offer on June 8, and the proceeds will be used to buy more BTC.
same day, El Salvador’s Legislative Assembly approves bitcoin as legal tender in country. President Nayib Bukele said that accepting bitcoin would be mandatory for all businesses. In addition, the government announced that it would eventually hold $150 million worth of BTC in a trust fund.
The positive news flow continued on June 8 after the $157 billion asset manager Victory Capital. Announces plans to invest in a private fund that tracks the Nasdaq crypto index, 62% in bitcoin, 32% in ether (ETH), and 6% in other altcoins.
Is the hand of the bull or the bear up?
The opening picture is slightly supportive as the call-to-put ratio is 0.93, although this indicator treats every option the same. However, the right to receive bitcoin at $42,000 in less than 24 hours is currently worthless, so this call option is trading below $40 each.
A similar effect holds for neutral-to-bearish put options of $30,000 and below. There is no use for the holders to carry this forward for the coming weeks as these contracts also become worthless. Therefore, to better assess how traders are positioning for Friday’s options expiration, analysts need to focus on the $33,000 to $41,000 range.
Bitcoin rose over 11% to $37,100 on June 9, forcing some neutral-to-bullish call options into a profitable position. With less than 24 hours as of Friday’s expiration, call (buy) options up to $41,000 amounted to 3,235 BTC contracts, currently valued at $120 million.
On the other hand, neutral-to-bearish reduced the option to $33,000 totaling 3,045 BTC contracts, which are currently valued at $113 million. So, both sides are almost balanced for Friday’s close.
Had Bitcoin stayed below $34,000, the bears would have gained $84 million, but a sequence of positive events seems to be enough to salvage the situation.
While there is no guarantee that the price will remain intact, at least the incentives for both sides to put pressure on prices are currently balanced.
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