Two or three weeks ago, when Bitcoin (BTC) was trading for less than $ 52,000, a trader who had bet $ 65,000 by October 22 was considered very optimistic. The fact that 98% of the weekly put and sell bitcoin options expiring on October 22nd were placed below this price proves that this is true.

Fast forward to this week, the successful launch of the first BTC Exchange Traded Fund (ETF) in the US and news that Digital Currency Group (DCG), the parent company of the Grayscale Bitcoin Trust, has increased its buy limit to $ 1. billions of GBTC shares, bringing the price of Bitcoin to record highs.

The $ 40.5 billion investment machine has been available to trade in the US markets since March 2015, and it recently filed with the US Securities and Exchange Commission (SEC) to convert its GBTC product into an ETF.

Bitcoin price on Coinbase in USD. Source: TradingView
Parabola hit a record $ 67,000 on October 20, boosted by upbeat comments from billionaire investor Carl Icahn. After making impressive profits in four decades, Icahn warned of the impending financial crisis and highlighted the power of Bitcoin as a hedge against inflation.

In addition, Deputy Minister of Industry and Trade of Russia Vasily Shpak presented a proposal to use gas production for oil exploration in the country for cryptocurrency mining. The Russian government tried to limit the flaring of associated gas in order to reduce emissions, but was unable to achieve its goals due to underdeveloped infrastructure.

While the expiration of the $ 1.8 billion option on October 22 is a convincing victory for the bulls, it was not the case two weeks ago.

Bitcoin Options collects open interest rates on October 15th. Source: Bybt
On the surface, the $ 1 billion call options on October 22 outnumbered only 23% over the $ 810 million put options.

However, the buy / buy ratio of 1.23 is misleading as the recent rally is likely to eliminate most bearish games if the bitcoin price stays above $ 64,000. October 22 at 08:00 UTC. Sell ​​Bitcoin for $ 60,000 if the price is higher than that.

Bulls seem very comfortable for $ 65,000
Here are the four most likely scenarios for the end of October 22nd. An imbalance in favor of both sides represents a theoretical profit. In other words, depending on the expiration price, the number of buy (buy) and sell (sell) contracts that become active varies:

Between $ 60,000 and $ 62,000: 8,670 calls versus 3,070 puts. Buying Instruments (Bull) has a net profit of $ 335 million.
From $ 62,000 to $ 64,000: 10,780 calls for 2,100 points. Buying Instruments (Bull) has a net profit of $ 540 million.
From $ 64,000 to $ 66,000: 13,050 calls to 280 positions. The net result is $ 830 million in favor of buying instruments (ox).
Over $ 68,000: 13,680 calls for 20 positions. The net result is complete dominance when the Bulls earn $ 940 million.
This rough estimate takes into account the buy options used in bullish play and the sell options exclusively in neutral or bearish trades. However, this simplification overlooks more complex investment strategies.

For example, a trader can sell a put option and receive a positive share of bitcoins above a certain price. Unfortunately, there is no easy way to calculate this effect.

Björner needs a 7% price adjustment to reduce the loss.
In each of the scenarios presented above, the bulls have full control over the October 22 expiration. The influx of positive news this week gives investors little reason to make a profit or accept a price correction before expiration. On the other hand, bears need a 7% move below $ 62,000 to avoid losing $ 830 million.

Traders should keep in mind that during bullish breakouts, it is usually a huge and ineffective effort for a seller to put pressure on price. For now, data from the options markets indicates a significant advantage of buy (buy) alternatives, increasing the bullish effort for the October 29th monthly expiration.

Source: CoinTelegraph

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