Bitcoin price capitulation below $26K increases as Friday’s BTC options expiry looms
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Bitcoin bulls aim for $27,000 to balance the scales
Below are the four most likely scenarios based on the current price action. The number of options contracts available on May 19 for call (bull) and put (bear) instruments varies depending on the expiry price.
The imbalance favoring each side constitutes the theoretical profit:
- Between $25,000 and $26,000: 100 calls vs. 7,800 puts. Bears in total control, profiting $190 million.
- Between $26,000 and $27,000: 1,100 calls vs. 4,300 puts. The net result favors the put (sell) instruments by $80 million.
- Between $27,000 and $28,000: 2,300 calls vs. 2,000 puts. The result is balanced between put and call options.
- Between $28,000 and $29,000: 5,700 calls vs. 700 puts. The net result favors the call (bull) instruments by $140 million.
This crude estimate considers the put options used in bearish bets and the call options exclusively in neutral-to-bullish trades. Even so, this oversimplification disregards more complex investment strategies.
For instance, a trader could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price. Unfortunately, there’s no easy way to estimate this effect.
Still, traders should be cautious as the bears are currently in a better position for Friday’s weekly options expiry, favoring negative price moves. Thus, an eventual capitulation below $26,000 should not be discarded.
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.
This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
