Derivatives data for Bitcoin weekly options suggests bears might have the upper hand in tomorrow’s $930 million expiry.
As usual, the leader Deribit holds a 90 percent share, but the recent market drop might have granted bears too much power.
While traders and analysts struggle to Discover a rationale for its 53% drop from the $64,900 all-time large, ExoAlpha CIO David Lifchitz perfectly described the current market conditions when he said:
“This looks like the final flush-out following the previous couple of months of an absurd bull run, shitcoin frenzy and other antics.”
The correction was so powerful that even enthusiastic Bitcoin defenders flipped, including the international Chief Investment Officer of investment giant Guggenheim, who dubbed crypto markets as’tulipmania’.
Regardless of the reasons behind the purchase price activity, traders that held inexpensive rights to sell Bitcoin at $45,000 or $46,000 are now observing.
Do not fall for what seems like a’balanced’ situation
Although the present setup looks balanced between telephone (buy) options as well as the neutral-to-bearish put (sell) options, Bitcoin’s 30% drop has changed the balance to favor bears over the past two weeks.
Out of the 11,872 call options, only 15% have been generated using $44,000 and reduced strikes. This implies the remaining 85% became useless, as there are less than 14 hours left for the weekly expiry. Therefore, the 1,850 neutral-to-bullish call options below $44,500 signify a 75 million open interest.
On the other hand, 88 percent of those set options have $36,000 or greater strikes. Those options allow its purchaser to market Bitcoin in a fixed cost, so many widely used on neutral-to-bearish strategies.
The bear’s benefit is Very Likely to melt for next week
Unlike futures contracts, there is very little gain in rolling within a losing position to the subsequent week. As we approach the expiry date, a right to get Bitcoin at $50,000 is effectively useless at this time. That’s the main reason bears’ recent advantage will probably continue exerting stress.
Overall, the set options at $36,000 and higher amount to $400 million in interest. The $325 million gap favoring the more neutral-to-bearish choices is a decent benefit because we approach Friday’s expiry.
However, it’s important to highlight that monthly choices usually handle most of the actions, and May 28 will be no different with $1.95 billion interest. Once it seems early to call it, sparks will likely continue to stress markets considering that there are no call options at $38,000 or lower for next week.