Why Bitcoin Bears Are Trying To Keep BTC Price Below $ 62,000 When Options Run Out

Bitcoin’s 90% year-to-date gain was largely driven by the SEC’s recent Exchange Traded Fund (ETF) approval and a ProShares strategic Bitcoin ETF ($ BITO) for the first 48 hours after it was listed. has amassed $ 1.1 billion in assets under management.

On November 1, the U.S. Treasury Department released its stablecoin report, essentially calling on Congress to regulate the industry. In short, the working group expects government agencies to meet the same standards of issuers of stablecoins as insured custodians.

While the possible regulatory consequences of stablecoins for the crypto market are unknown, stablecoins are important for exchanges, market makers, and retail investors seeking protection. Even so, investors need to be aware of the possibility that stablecoin issuers are reacting by moving their business outside of US jurisdiction.

Less than 12 hours before the $ 1.15 billion options expire on Friday, Bitcoin is trading on a descending channel, facing resistance at $ 62,000 to $ 63,000.

ETF expectations could be the reason for the bulls’ exaggerated optimism shown in bets of $ 68,000 or more to expiration on Nov. 5, even after $ 740 million pending missed the opportunity to make a relevant profit to achieve.

At first glance, 11,215 BTC call (buy) options dominate 82% of the weekly expiration times compared to 6,146 BTC put (sell). The 1.82 call-to-put ratio is a scam, however, as some of those prices currently seem too far-fetched.

For example, if the price of Bitcoin stays above $ 60,000 at 8:00 a.m. UTC on November 5, only $ 70 million of the $ 405 million call (put) option will be available upon expiration. There is no value in selling Bitcoin for $ 55,000 when it is trading above that price.

It takes bears less than $ 62,000 to balance the scales

Here are the four most likely scenarios for a $ 1.15 billion leak on November 5th. An imbalance in favor of one of the parties represents a theoretical profit. In other words, the number of active call (buy) and put (sell) contracts varies depending on the expiry price:

• From $ 58,000 to $ 60,000: 270 calls versus 1,800 bookings. The net result favors the instruments (bears) put $ 90 million.
• From $ 60,000 to $ 62,000: 630 calls versus 350 calls. he advocated the net result of the instrument (bear) an additional $ 15 million.
• From $ 62,000 to $ 64,000: 1,560 calls versus 370 bookings. Net income is $ 75 million coping support.
• Over $ 64,000: 2,890 calls versus 100 bookings. The net result was complete dominance, with the bulls making $ 175 million.

This rough estimate looks at call (buy) options used in bullish and put (sell) strategies specifically for neutral to bearish trades. However, a trader may have sold a put, effectively reaching a positive level for Bitcoin above a certain price. Unfortunately, there is no easy way to gauge this effect.

Related: The on-chain bitcoin index suggests the 2017 style bull run will continue

Bulls have a clear chance of making a profit of $ 175 million

Bitcoin price is currently hovering near $ 62,000 and there are incentives for the bulls to increase BTC by 3.5% to $ 64,000 before it expires on Friday. If so, their estimated profit would increase by $ 100 million.

On the flip side, given Bitcoin’s 39 percent gain in October, the bears will happily lose $ 15 million if BTC’s expiry price stays below $ 62,000.

Avoiding the bulls’ $ 175 million profit is the current best case scenario for the bears, as the effort on sellers to manipulate price during a bull run is enormous and often inefficient.

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