After a 160% enhance over the previous 3 months, the open curiosity on Bitcoin (BTC) choices reached a brand new record-high at $12 billion. Whereas this quantity may appear unusually excessive, it is smart that the determine would enhance as Bitcoin’s market capitalization surpassed $1 trillion.
Deribit BTC choices open curiosity in USD. Supply: laevitas.ch
Though Friday’s $3.2 billion expiry may negatively affect the market, these choices are cut up amongst calls (neutral-to-bullish) and the extra bearish put choices.
As proven within the chart above, Deribit alternate leads the market by holding an 85% market share. For the Feb. 26 expiry, 58,500 BTC contracts stay open and that is equal to $3.2 billion.
Earlier than leaping to conclusions on whether or not the end result may be bullish or bearish, it is important to take a extra detailed view of the potential purchase and promote stress nearing expiry.
Paying for a $38,000 put (promote) choice might need made sense three weeks in the past, however this commerce is now nugatory. Due to this fact, to accurately assess the affect of the upcoming expiry, these must be excluded.
Mixture Feb. 26 BTC choices open curiosity by strike. Supply: bybt.com
On the alternative facet from these nugatory put choices beneath $40,000 are some ultra-bullish calls as much as $88,000. Contemplating there’s lower than every week left earlier than the expiry, a 63% BTC value enhance appears unlikely.
As proven above chart, the neutral-to-bearish put choices are vastly concentrated between $18,000 and $40,000. Presently, over 80% of the Feb. 26 put choices fall underneath that vary, so that they shouldn’t be thought of for the potential value stress.
The remaining 4,550 BTC put choice contracts, at present price $245 million, current incentives to maintain BTC beneath $52,000.
The extra bullish name choices starting from $36,000 to $56,000 quantity to 17,670 BTC contracts, which is equal to $955 million in open curiosity. Due to this fact, essentially the most related choices open curiosity for Feb. 26 stands at $1.2 billion whereas holding a 0.20 put-to-call ratio.
Deribit Mar. 26 put choice costs in BTC. Supply: Deribit
For bears wishing to roll over the place to March 26, the $44,000 put choice is at present buying and selling at $1,970 per contract. That will require a 16% draw back from the present $54,000 BTC value to generate some revenue.
At this second, bulls are in complete management of Friday’s expiry, particularly contemplating the heavy imbalance favoring the buy-side. As for the bears’ potential roll-over exercise, the risk-reward appears unattractive.
The views and opinions expressed listed here are solely these of the writer and don’t essentially replicate the views of Cointelegraph. Each funding and buying and selling transfer entails danger. You need to conduct your individual analysis when making a choice.