Bulls take control of Bitcoin options market

A total of 42,850 Bitcoin (BTC) options contracts ($1.7 billion) will expire on Friday, July 30. Friday marks the first weekly expiry day since May 21, when bulls can take advantage of $40,000 call options.

Bitcoin’s latest rally was triggered by a rumor that Amazon would accept crypto payments, but BTC remained strong despite the e-commerce giant’s denial of the rumor.

Regardless of the reason behind the market strength, options markets offer several reasons for bulls to defend the $40,000 level.

Open positions of Bitcoin options that expire on July 30, based on the transaction price. Source: Bybt.com

At first glance, the analysis shows that call options that reflect neutral or bullish prospects have a 21 percent advantage over the buy and sell rate. However, the vast majority of these call options have a strike price of $45,000 or more.

The control is entirely in the bulls.

Bears who are overconfident in monthly options placed as much as 87 percent of neutral or bearish put options at $39k and below. If the bears can push the price below this level by expiration, another $105 million worth of put options will be available.

Call options with a transaction price of less than $39,000 have a value of $320 million. So the bulls have a $215 million advantage over the bears.

The value of the open positions of the bulls will increase by $140 million if the price holds above $40,000. This difference seems to be reason enough to defend $40,000.

So in the current situation, the options market reveals that the bulls have a serious advantage, at least in the short term.

The opinions and views expressed here are those of the author alone and do not necessarily reflect those of Cointelegraph. Every investment involves risk. Do your own research before making a decision.

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