Bitcoin bears have a $340M lead heading into Friday’s BTC options expiry
The price of bitcoin (BTC) is slowly recovering after a sharp correction of 16% in the first hours after FY18. April.
While some analysts blame the 9,000 BTC field in Binnes, others have focused on the hashrate caused by the coal industry crash in China. Whatever the reason for the $51,200 bottom, options producers were forced to adjust their exposure.
In general, arbitrage tables look for non-directional exposure, meaning they do not directly bet on BTC moving in a particular direction. However, neutralizing the impact of options usually requires dynamic hedging, meaning that positions must be adjusted according to the bitcoin price.
Risk adjustment in these arbitrage firms usually involves selling BTC when the market falls, which increases the pressure on long liquidation trades. It is therefore useful to understand the current level of risk as the options’ expiration date approaches on the 23rd. April is coming. We will try to analyze if the bears will benefit from the $50,000 BTC price.
The first forecast seems to be balanced
For the correction of the 18th. By April, BTC had gained 74% in three months and reached an all-time high of $64,900. It is therefore obvious that investors will adopt a more proactive approach to defensive options.
Bitcoin April 23 Global Options. Source: Bybt
While a neutral to bullish call option (call) offers the buyer protection in the event of an upward move, the opposite happens with more bearish put options (put). By measuring the degree of risk at each price level, traders can get an idea of whether they are bullish or bearish.
The total number of contracts signed at 23. The April maturity represents 27,320 BTC or $1.55 billion at the current price of $56,500. However, the bears and bulls seem to balance each other out, as calls account for 45% of open interest.
TheBears have a good lead after the recentcrash.
If the first picture looks neutral, consider that calls of $64,000 or more are worth virtually nothing with less than three days until expiration. A more bearish situation will occur if these 6,400 bullish contracts, currently trading below $50 each, are removed.
Neutral and bearish puts dominate with 70% of the remaining 19,930 BTC contracts. The open interest is $1.13 billion given the current bitcoin price, and that gives the bears a $450 million advantage.
The bulls were apparently overwhelmed when bitcoin rebounded from a record low on the 14th. In April, there was a 13% drop. A paltry 3,000 BTC call options remained under $58,000, representing just 24% of the total.
Meanwhile, neutral and bearish puts account for 9,000 BTC contracts at $55,000 and above. This difference represents an open interest of $340 million, which is beneficial.
As it stands, the $57,000 to $64,000 price range is fairly balanced, suggesting that the Bears have an interest in keeping the 23 priced. April low.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph. Every investment and every stage of trading involves risk. You should do your own research before making a decision.
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