Bitcoin corrects on Fed rate hike, but bulls are prepared for Friday’s $1.2B options expiry

Bitcoin’s (

The most likely outcomes favor bulls by a wide margin

Below are the four most likely scenarios based on the current price action. The number of options contracts available on March 24 for call (buy) and put (sell) instruments varies depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

• Between $25,000 and $26,000: 7,400 calls vs. 5,500 puts. The net result favors the call (buy) instruments by $50 million.
• Between $26,000 and $27,000: 9,100 calls vs. 3,700 puts. The net result favors the call instruments by $140 million.
• Between $27,000 and $28,000: 12,700 calls vs. 800 puts. Bulls increase their advantage to $330 million.
• Between $28,000 and $29,000: 14,300 calls vs. 20 puts. Bulls’ advantage increases to $405 million.

This rough estimate considers only call options in bullish bets and put options in neutral-to-bearish trades. Nonetheless, this oversimplification excludes more complex investment strategies. A trader, for example, could have sold a put option, effectively gaining positive exposure to Bitcoin above a certain price, but this effect is difficult to estimate.

Bears can only reduce their losses, so they are likely to throw in the towel and concentrate on the $3.8 billion monthly expiry on March 31. However, based on the weekly options data, bulls are in a great position to profit at least $330 million.