$1.12B in Bitcoin options expire this week, and bulls appear to be at a disadvantage
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Bitcoin’s (
Bulls and bears have similar incentives, so the outcome is unpredictable
Below are the four most likely scenarios based on the current price action. The number of options contracts available on April 7 for call (buy) and put (sell) instruments varies depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:
- Between $26,000 and $27,000: 300 calls vs. 6,000 puts. The net result favors the put (sell) instruments by $150 million.
- Between $27,000 and $28,000: 1,200 calls vs. 3,500 puts. The net result favors the put instruments by $60 million.
- Between $28,000 and $29,000: 4,500 calls vs. 1,100 puts. Bulls flip the tables and profit $100 million.
- Between $29,000 and $30,000: 8,500 calls vs. 100 puts. Bulls’ advantage increases to $240 million.
This rough estimate considers only put options in bearish bets and call options in neutral-to-bullish trades. Nonetheless, this oversimplification excludes more complex investment strategies. A trader, for example, could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price, but this effect is difficult to estimate.
The critical level for the weekly expiration is $28,000, but it is impossible to predict the outcome due to increased economic recession risks and market volatility. If bulls are able to secure a $100 million, those funds will most likely be used to further strengthen the support level.
The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
