Bears aim to get the BTC price below $ 62,000 when the option expires today

Bitcoin price fell to $ 60,700 on November 4th and the bears want to push the price below $ 62,000 to take advantage of options expiring today (November 5th).

Bitcoin’s 90% year-to-date (YTD) gain was largely driven by the recent SEC approval of Exchange Traded Funds (ETF) and, over the past 48 years, the Bitcoin Strategy ETF (BITO) has managed assets of Amassing $ 1.1 billion.

On November 1, the U.S. Treasury Department released a report on stablecoins, 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 it remains unclear what potential regulatory ramifications for stablecoins will be on the crypto market, stablecoins are important for exchanges, market makers, and retail investors seeking protection when the market is volatile. Even so, investors need to be aware of the possibility that stablecoin issuers are reacting by moving their business outside of US jurisdictions.

With less than 12 hours to go on $ 1.15 billion worth of options to expire today, Bitcoin is trading on a descending channel, meeting resistance at $ 62,000 to $ 63,000.

Bitcoin price chart | Source: TradingView

ETF expectations could be the reason for the bulls’ over-optimism showing with stakes of $ 68,000 or more for the November 5th expiration date, even with $ 740 million amassed making some related gains.

Bitcoin Option OI Summary November 5th | Source: Bybt

11,215 BTC call options dominate 82% with weekly expiration versus 6,146 BTC put options. The 1.82 call-to-put ratio is wrong, however, as some of those prices currently seem too far-fetched.

For example, if Bitcoin price is still above $ 60,000 at 3:00 p.m. on November 5, then only $ 70 million of the $ 405 million put options will be available when it expires. If the Bitcoin price is above $ 55,000 at the time of expiry, the right to sell Bitcoin at that level becomes worthless.

Bears have to keep Bitcoin below $ 62,000

Here are the four most likely scenarios for $ 1.15 billion in Bitcoin options to expire today. An imbalance in favor of one of the parties represents a theoretical gain. In other words, depending on the expiry price, the number of active buy and sell contracts varies:

• From USD 58,000 to USD 60,000: 270 buy orders vs. 1,800 sell orders. The net result is a win for $ 90 million call options (bears).
• From $ 60,000 to $ 62,000: 630 buy orders vs. 350 sell orders. Net income supports $ 15 million additional call options (bears).
• From $ 62,000 to $ 64,000: 1,560 buy orders vs. 37 sell orders. The net result is $ 75 million in favor of call options (bulls).
• Over $ 64,000: 2,890 buy orders vs. 100 sell orders. The net result is complete dominance, cops making $ 175 million.

This rough estimate looks at calls that are used in bullish and put strategies specifically for neutral to bearish trades. However, a trader could effectively have sold a put to get positive exposure to Bitcoin above a certain price. Unfortunately, there is no easy way to gauge this effect.

Bitcoin price is currently hovering above $ 61,000 and the bulls have the advantage of driving BTC up 3.5% to $ 64,000 before the option expires today. If so, their estimated profit would increase by $ 100 million.

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

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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According to Cointelegraph

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