On Friday, June 11, Bitcoin (BTC) options totaling $565 million will expire. This is important because the last two weeks have been a huge scam for the bulls. In the end, the price struggled to maintain the $33,000 support.
However, an unexpected bullish event saw an 18.5% reversal from the $31,000 low on June 8 to $38,491 today. This strong move saved the bulls as any level below $34,000 will erase 98% of the current call (buy).
Who saved the day?
First, MicroStrategy, a listed company with more than $3.2 billion worth of bitcoin, closed a $500 million bond offering on June 8, the proceeds of which will be used to buy more bitcoin.
On the same day, El Salvador’s legislature approved bitcoin as legal tender in the country. President Nep Bukele said the adoption of bitcoins will be mandatory for all businesses. In addition, the government announced that it will eventually receive $150 million in BTC in a mutual fund.
The flow of positive news continued on June 8 after Victory Capital, which manages $157 billion in assets, announced plans to invest in a private fund that tracks the Nasdaq cryptocurrency index, 62% of which are Bitcoin, 32% Ether (ETH) and 6%. for other currencies.
Is there an advantage for bulls or bears?
Jun 11 Bitcoin Alternatives Summary. Source: Bybt
The first image shows a bear because the buy-to-be ratio is 0.93, even though this indicator values all options in the same way. However, the right to buy bitcoins for $42,000 in less than 24 hours is currently useless, so each call option trades for less than $40 per option.
On the topic: The report says that the Bitcoin pump in El Salvador has not yet been able to attract smart money.
A similar effect is observed for neutral to bearish put options at $30,000 or less. Shareholders have no advantage in undoing them in the coming weeks because these contracts have also become worthless. Thus, analysts need to focus on $33-41,000 to better assess the position of traders in terms of options expiration on Friday.
On June 9, Bitcoin surged more than 11% to $37,100, resulting in profitable trades on some neutral or bullish call options. Less than 24 hours before the end of Friday, the number of purchases (purchases) of $41,000 reached 3,235 bitcoin contracts, which currently stand at $120 million.
On the other hand, neutral bearish put options reached $33,000 for a total of 3,045 bitcoin contracts, currently valued at $113 million. Thus, by the end of Friday, the two sides are practically in equilibrium.
If bitcoin stays below $34,000, the bears will have an advantage of $84 million, but the sequence of positive developments appears to be enough to salvage the situation.
While there is no guarantee that the price will remain constant, at least both sides have balanced incentives to raise the price.