Bitcoin was back at $ 57,000 on Oct. 13 when a classic move prompted traders to liquidate $ 200 million.
Data from TradingView shows that Bitcoin hit $ 58,390 in less than three hours, up $ 3,100.
Bitcoin rebounded 5.5% that day, hitting a five-month high rendering short positions above $ 54,260 worthless given bulls’ optimism.
Analyst Michael van de Poppe Comment:
“Bitcoin’s correction compares well with the price move in August. Only minor corrections for a few days, then Bitcoin continues to rise while altcoins in their BTC pair fall.”
Meanwhile, analyst Rekt Capital confirmed a higher low for Bitcoin during the retracement.
#BTC makes a higher low on the dip and continues to hold the blue level as support
– Rekt Capital (@rektcapital) October 13, 2021
Amid optimism, people are aiming for a six-figure amount after Bitcoin breaks out of a multi-month downtrend and confirms that an uptrend is underway.
If Bitcoin happened to enter a parabolic move towards USD 110,000, it would ultimately be in line with the predictions of the Stock-to-Flow (S2F) model. According to PlanB, the scarcity and valuation of gold and other precious metals along with “Elon Musk’s Energy FUD and China’s Mining Crackdown” are some of the factors that make up the 50 percent accuracy. % or higher for the model for the past five years months.
The bulls’ hopes are largely based on an exchange traded fund (ETF) under review by the US Securities and Exchange Commission. Currently, many proposals are waiting for approval between October 18 and November 1, but the regulator may delay its final decision.
The aftermath of the Chinese crackdown on mining is a key event that could boost investor sentiment, and research shows the U.S. accounts for 35.4% of bitcoin hashrate.
In addition, US states like Texas and Ohio are also expected to receive more large-scale Bitcoin mining hubs, which will further increase US crypto market share.
Futures open interest explodes over 70%
While, data Of derivatives market instruments, the open interest (OI) for Bitcoin futures on CME skyrocketed last month, further fueling the positive cause of the upcoming price action.
While the trend is still below the February all-time high (ATH), the trend is encouraging given the possibility of traders applying for approval of a futures-based ETF in the US.
Bitcoin Futures Open Interest Chart | Source: Javier Paz / Twitter
CEO of Three Arrows Capital, Zhu Su Say more based on data from Forbes analyst Javier Paz.
“Bitcoin futures spark interest in CME by 20,000 BTC in over a month, remarkable.”
Bulls prevail before the option expires
Tomorrow’s $ 830 million option expiry (October 15) will be largely influenced by the 20% rally that began on October 4, which most likely eliminated 92% of the put (put) options.
Bitcoin price chart | Source: TradingView
After last week’s estimated net gain of $ 370 million from options forfeiture, the bulls have received a boost, and it can be seen in tomorrow’s $ 820 million option expiration. This advantage explains why the open interest of the call option is 43% higher than that of the neutral to bearish put.
Bitcoin Options OI summary for October 15th | Source: Bybt
As the data above shows, the bears placed bets of $ 335 million on the Friday expiration date, but it looks like they got caught by surprise as 92% of the put options are likely to become worthless.
In other words, if Bitcoin stays above $ 56,000, only $ 36 million of neutral to bearish put options will be activated tomorrow at 3:00 p.m. UTC.
Here are the four most likely scenarios for the option to expire on October 15: An imbalance in favor of either party means a potential gain on the expiration. In other words, depending on the expiry price, the number of active buy and sell contracts varies:
- From $ 52,000 to $ 54,000: 3,140 buy orders vs. 2,110 sell orders. Net income is $ 55 million in favor of call options (bulls).
- From $ 54,000 to $ 56,000: 3,700 buy orders vs. 1,240 sell orders. The net result is $ 130 million in favor of call options (bulls).
- From $ 56,000 to $ 58,000: 4,850 buy orders vs. 680 sell orders. The net result is $ 235 million in favor of call options (bulls).
- Over $ 58,000: 6,230 buy orders vs. 190 sell orders. The net result is complete dominance, the cops making $ 350 million.
This rough estimate assumes that the call will only be used in bullish bets and puts the option in neutral to bearish trades. However, investors could have used a more complex strategy that often involves different expiration dates.
In any case, the bulls are in absolute control and there are several reasons for them to keep the price above $ 56,000. On the flip side, the bears will have to push the price 7% below $ 54,000 to avoid a loss of $ 235 million or more.
However, traders need to be aware that during rallies, sellers’ attempts to put pressure on prices are enormous and often ineffective. Analysis suggests a significant advantage of the call options, leading to more bullish bets next week.
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According to AZCoin News