The win is for $ 950 million bitcoin options that expire on Friday

Bitcoin (BTC) price has gone down this week and of course bears will always find some kind of reversing signal when the price shows strength, such as the 8% rally in November. Of course, technical analysis is not an exact science, so there is a range to interpret, and most traders look at multiple time frames to find a story that fits the trend.

Currently, BTC price is in a descending channel that started on October 31st, and if this pattern shows, Bitcoin could drop to $ 50,000 in the short term.

The crypto market crashed on November 26 after fears of a new variant of COVID-19 caused a sell-off in global markets. When Bitcoin fell below $ 54,000, the bears saw a potential profit of $ 215 million on Friday when the options expired, but that changed after BTC price regained support at $ 57,000.

In addition, US regulatory concerns continue to weigh on the market. On November 24, the chairman of the US Senate Banking Committee asked for information from stablecoin issuers and exchanges on December 3.

In early November, the President’s Working Group on Financial Markets released a report showing that stablecoin issuers in the US are subject to “reasonable federal control” similar to that of banks.

Fueled by potential government interference and negative short-term consequences, Bitcoin bears are likely to make $ 80 million by the time the option expires on December 3rd.

At first glance, call (buy) options worth $ 460 million are in equal parts with put (sell) instruments worth $ 485 million, but the call-to-put ratio of 0.96 is a scam as the 17% discount from $ 69,000 is likely to undo most uptrends bets.

For example, if the price of Bitcoin stays below $ 57,000 at 8:00 a.m. UTC on Friday, these call (buy) options will only be available to the value of $ 24 million. Hence, the right to buy Bitcoin at $ 60,000 has no value if it trades below that price.

Bears are comfortable with Bitcoin under $ 57,000

Here are the four most likely scenarios for a 3 month option expiration of $ 950 million. The imbalance in favor of each party represents the theoretical profit. In other words, depending on the expiry price, the number of active call (buy) and put (sell) contracts varies:

• From $ 54,000 to $ 56,000: 290 calls versus 3,480 bookings. The net result was $ 175 million in favor of the put (Bear).
• From $ 56,000 to $ 58,000: 750 calls versus 2,160 bookings. The net result was $ 80 million in favor of deal instruments (bears).
• From $ 58,000 to $ 60,000: 1,510 calls versus 1,040 bookings. The net result was $ 30 million in favor of the (bullish) call option.
• Over $ 60,000: 2,760 calls versus 860 bookings. Net income is $ 115 million coping support.

This rough estimate takes into account calls used in bullish bets and only places calls on neutral to bearish trades. However, this oversimplification ignores more complex investment strategies.

For example, a trader could have sold a put, effectively making Bitcoin (BTC) a positive level above a certain price. However, it is unlikely that there is no easy way to gauge this effect.

Cops take $ 58,000 or more to balance the scales

The only way for the bulls to avoid losses on the December 3rd expiration date is to push Bitcoin price above $ 58,000, 2% off the current $ 56,900. However, if the current negative short-term sentiment prevails, the bears could put some pressure on and seek a profit of $ 175 million if Bitcoin price stays below $ 56,000.

Currently, the options market data is slightly skewed towards the put (sell), which offers the opportunity for additional FUD and a sudden market crash.

The views and opinions expressed here are solely those of author and do not necessarily reflect the views of Cointelegraph. Every investment and trading movement involves risks. You should do your own research when making a decision.