Bitcoin $ 58k and ETH $ 4.7k are profit pivot points for bulls on today’s option expiration

By the way, another week has passed and today is the weekly expiration date of the options for both Bitcoin and ETH. Here are the notable developments nearing expiration:

Bitcoin bulls have to price over $ 58k. to press

With Bitcoin under $ 57,000, the bears appear to have a slight edge this week over $ 950 million worth of options expiring.

Bitcoin price has been down this week and bears are always trying to block reversal signals when the price shows strength, like the 8% rally on November 28th. Of course, technical analysis is not accurate, so most traders look at multiple time frames to find a story that fits their trend.

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

Bitcoin / USD price chart | Source: TradingView

The cryptocurrency market collapsed on November 26th after fears of a new variant of Covid-19 sparked a panic sell-off in global markets. When Bitcoin fell below $ 54,000, the bears foresaw a potential profit of $ 215 million by the option expired today (Dec. 3), but things are not going as well, Bitcoin has regained support.

In addition, US regulatory concerns continue to weigh on the market. 24, U.S. Senate Banking Committee chairman Sherrod Brown, asked how investors and consumers can be protected from stablecoin issuers and exchanges, such as: Bitcoin magazine reported.

In early November, the US Presidential Financial Markets Working Group (PWG) published a report recommending that stablecoin issuers in the US be subject to “reasonable federal controls,” similar to those used by banks.

Fueled by potential government interference and negative short-term consequences, Bitcoin bears are likely to make $ 80 million today (December 3rd) on the options expiration.

Bitcoin Options Open Rate Summary for December 3rd | Source: Coinglass.com

The $ 460 million call options contrast with the $ 485 million put options, but a 0.96 call-to-put ratio is imprecise as the 17% drop from $ 69,000 will likely nullify most bullish bets power.

For example, if Bitcoin price is still below $ 57,000 at 15:00 GMT expiration time, there will only be $ 24 million available for call options. Hence, the right to buy Bitcoin for $ 60,000 has no value if it trades below that level.

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 buy and sell contracts varies:

• From $ 54,000 to $ 56,000: 290 buy orders vs. 3,480 sell orders. The net result is $ 175 million in favor of the bears.
• From $ 56,000 to $ 58,000: 750 buy orders vs. 2,160 sell orders. The net result was $ 80 million in favor of the bears.
• From $ 58,000 to $ 60,000: 1,510 buy orders vs. 1,040 sell orders. The net result is $ 30 million in favor of the cops.
• Over $ 60,000: 2,760 buy orders vs. 860 sell orders. The net result is $ 115 million in favor of the cops.

This rough estimate looks at calls used in bullish bets and places neutral to bearish trades. However, this simplification does not imply more complex investment strategies.

The only way for the bulls to avoid losses today is to push Bitcoin price above $ 58,000, 2% from the current $ 56,900. However, if the current negative short-term sentiment prevails, the bears can put some pressure on and make profits of up to $ 175 million if Bitcoin price stays below $ 56,000.

Currently, options market data is slightly skewed in the direction of the put, which offers the opportunity for additional FUD and a sudden market crash.

Switching to US $ 5,000 is not cheap for ETH

This week, the price of ether is about 2% off its all-time high (ATH), hitting its highest price against Bitcoin since May 2018 on December 2nd. ETH / BTC hit the all-time high equivalent to a gain of 229% for 2021, but the bulls could end up with nothing if the $ 680 million option expires today.

ETH / BTC price chart | Source: TradingView

Note that ascending channeling began in mid-October, potentially reflecting $ 177 billion in Total Value Locked (TVL) in smart contracts. In addition, the number of tokens blocked in the ETH 2.0 Beacon Chain reached 8.45 million, an increase of 4.5% in November.

Last week, four Ethereum blockchain-based Metaverse projects generated $ 106 million in virtual land in NFT sales, Bitcoin Magazine reported.

However, Ether investors may be concerned about the December 8th meeting of the US House of Representatives, where the committee will focus on “Digital Assets and the Future of Finance.” Stablecoin issuers and exchange CEOs have been invited, so there could be some potential new regulatory threats.

ETH Options Open Interest Summary for December 3rd | Source: Coinglass.com

A broader view using the call-to-put ratio shows a 19% advantage in favor of the bears, as the $ 375 million put options have greater open interest than the $ 305 million call . The 0.81 indicator is inaccurate as the 49% rally has rendered most bearish bets worthless since September.

For example, if the price of Ether stays above $ 4,400 this afternoon at 3:00 p.m., those put options will only be available worth $ 68 million. Therefore, a put option on Ether at $ 4,400 would be worthless if traded above that price.

Here are the three most likely scenarios based on the current price trend. The number of options contracts available today for call and put options depends on the ETH price at expiry. An imbalance in favor of both represents a theoretical gain:

• From $ 4,300 to $ 4,500: 11,300 buy orders vs. 15,400 sell orders. The net result is equilibrium.
• From $ 4,500 to $ 4,700: 21,700 buy orders vs. 7,300 sell orders. The net result is $ 65 million in favor of the cops.
• Over $ 4,700: 26,000 Buy Orders vs. 5,000 Sell Orders. The net result is $ 100 million in favor of the cops.

This rough estimate looks at calls used in bullish bets and places neutral to bearish trades. However, this simplification does not imply more complex investment strategies.

Ethereum bulls need to jump 4.7% from $ 4,500 to $ 4,700 to make a profit of $ 100 million. On the flip side, bears only need to keep Ether price below $ 4,500 to avoid losses.

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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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