Bitcoin’s $6.1 billion options expiry was not enough to break the bearish sentiment

Bitcoin's $6.1 billion options expiry was not enough to break the bearish sentiment


Bitcoin’s (BTC) price has been ranging between $46,000 and $52,000 for 26 days. Despite the large nominal $6.1 billion year-end options expiry, the bullish and bearish instruments were evenly balanced between $44,000 and $49,000.

Therefore, it was no surprise that the $47,175 price at 8:00 am UTC on Dec. 31 brought little change to the price structure. Even the 3% rally to $48,500 following the event failed to sustain itself, signaling that bears are unwilling to cede their upper hand.

Bitcoin/USD price on Coinbase. Source: TradingView

Bulls might have interpreted the 9,925 BTC leaving Coinbase in 24 hours as a positive trigger, considering fewer coins are available on exchanges for newcomers. Besides, the first week of the year has been positive for the past four years, averaging 18.5% gains for Bitcoin holders.

To further support bulls’ thesis, the United States listed tech company MicroStrategy added another 1,914 BTC to their balance sheet on Dec. 30. On the negative side, regulation continues to pressure the markets as South Korean exchanges require users to verify their third-party wallet addresses to comply with the Financial Action Task Force (FATF) travel rule guidelines.

bybit

Bitcoin had a stellar 2021 anyway

Regardless of the short-term bearishness behind December’s 16% price drop, Bitcoin continues to vastly outperform both U.S. stocks and gold for the third year in a row. Yet, that performance was not enough to avoid every $48,000 and higher call (buy) option instrument becoming worthless as the Dec. 31 expiry price came in lower.

Bitcoin options aggregate open interest for Dec. 31. Source: Coinglass.com

At first sight, the $4.0 billion call (buy) options vastly outperformed the $2.1 billion put (sell) instruments, but the 1.9 call-to-put ratio is deceptive because the 16% price drop from Nov.’s $57,000 close wiped out most of the bullish bets. Therefore, there is no value in the right to buy Bitcoin (call option) at $50,000 if it is trading below that price.

Bulls and bears instruments were evenly marched for the Dec. 31 Bitcoin options expiry, which came in much smaller than expected at $660 million. Yet, bears were unable to take control as 85% of their bets have been placed at $47,000 or below. Such data partially explains why the Dec. 31 expiry was followed by an attempt from bulls to regain momentum.

Will the first week of 2022 finally be able to revert the slightly negative sentiment that has prevailed since the Dec. 3 crash? Unfortunately, according to Bitcoin options markets, there is no indication that the tide has changed.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

You have not selected any currency to display

Pin It on Pinterest

Crypto-Moon
Fiverr
Crypto-Moon
Bitcoin's $6.1 billion options expiry was not enough to break the bearish sentiment
bybit
undefined
Ledger
How Bitcoin Miners Are Tapping Into the AI Gold Rush – Part 1
High Levels of FOMO Hint at Bitcoin Rally Halt After BTC's Surge Above $64K
Nigerian Fintech Okra Launches Cloud Unit to Boost Revenue
3 Reasons Why Bitcoin (BTC) Could Bounce This Month: Details
Nigerian Regulator Pledges to Fight Crypto Fraud
Peter Todd Denies Being Satoshi Following HBO Film Claims
Cudo Miner
Changelly
RI Mining Free Cloud Mining App Is Officially Launched
Galaxy Digital moves $447M in Bitcoin to exchanges, sparking sell-off speculation
Bitcoin consolidates below $120K; Analysts say Ethereum flows will guide next market move
Bitcoin Mining Giant Mara Completes $950M Deal to Buy More BTC
Bitcoin Range Break Brewing, Which Altcoins Will Follow?
RI Mining Free Cloud Mining App Is Officially Launched
Galaxy Digital moves $447M in Bitcoin to exchanges, sparking sell-off speculation
Bitcoin consolidates below $120K; Analysts say Ethereum flows will guide next market move
Bitcoin Mining Giant Mara Completes $950M Deal to Buy More BTC