Bitcoin Bulls in a Good Position to Profit from This Week’s $4.2 Billion Options Expiry!

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On March 31, a $4.2 billion BTC option will expire, and despite weeks of harsh regulatory measures against the crypto sector, bulls remain in a profitable position. Bitcoin’s $4.2 Billion Options Are Expiring! Regulation, particularly after the Commodity Futures Trading Commission (CFTC) filed a lawsuit against Binance for trading and derivatives law violations, continues to be the main concern for Bitcoin bulls. Regulators are demanding that Binance repay trade profits, revenues, salaries, commissions, loans, and fees received from US citizens, as well as pay civil penalties for violations. The rise in Bitcoin’s price was also supported by a change in sensitivity to risk assets after US Federal Reserve Chairman Jerome Powell said that raising interest rates is no longer the default move to control inflation. The central bank understood that the current situation would likely lead to “tighter credit conditions for households and businesses, which would also affect economic outcomes.” Fixed-income investors earn more when interest rates rise, making stocks and commodities less attractive. As a result, the Fed decided to reverse the strategy and add $339 billion in liabilities in two weeks to control the banking crisis, which could lead to uncontrolled inflation. Considering the incremental scenario for risk assets, Bitcoin bulls could earn up to $1.4 billion in profit when the monthly option expires on Friday. Bitcoin bears were completely caught off guard, although the open interest for the March 31 option was $4.2 billion, they were expecting price levels below $26,500, so the actual figure will be lower. These traders were surprised by Bitcoin’s 32% increase between March 12-17. Bitcoin Call Open Interest, Put Open Interest Ratio (What they are below) | Total open interest rate of Bitcoin options for March 31. Source: CoinGlass The 1.34 call-put* ratio reflects the imbalance between $2.4 billion in call (buy) open interest and $1.8 billion in put (sell) options. However, if Bitcoin’s price remains around $28,000 at 8:00 UTC on March 31, only $25 million of these put options will be available. This difference will arise if BTC trades above that level on the last expiration date, rendering the right to sell Bitcoin at $26,000 or $27,000 useless. Bulls are targeting $29,000 for a record-breaking profit of $1.4 billion. Based on current price movements, the following four scenarios are the most likely. The number of option contracts available for call (bull) and put (bear) instruments on March 31 varies depending on the expiration price. The imbalance in favor of each side creates theoretical profits: Between $25,000 and $26,000: 27,200 calls vs. 12,700 puts. The net result shows call (bull) instruments in favor of $360 million. Between $26,000 and $27,000: 32,300 calls vs. 8,500 puts. The net result shows call (bull) instruments in favor of $620 million. Between $27,000 and $28,000: 38,100 calls vs. 3,000 puts. Bulls increase their advantage to $1.2 billion. Between $28,000 and $30,000: 48,300 calls vs. 400 puts. Bulls maintain their dominance by earning $1.4 billion in profit. This simple estimate only considers call options used in bull bets and put options that only go from neutral to bear. However, this simplification ignores more complex investment strategies. For example, a trader can sell a call option to gain negative exposure to Bitcoin above a certain price, but there is no easy way to predict this effect. Bears’ best hope is based on regulatory FUD Bitcoin bulls must raise the price above $29,000 by March 31 and secure the potential $1.4 billion profit. Bears’ best chance is based on more regulatory FUD related to stablecoins or major crypto exchanges – but so far, it has been unsuccessful. Considering the bullish momentum created by the Fed, which cannot continue to raise interest rates, Bitcoin bulls are in a good position for the March BTC monthly option expiration. These profits will likely be used to further strengthen the $28,000 support, so the expected outcome is particularly concerning for bears. The price of Bitcoin (BTC) has been fluctuating around $28,000 for the past ten days, but the cryptocurrency has gained 70.5% in value since the beginning of the year. Until March 17, Bitcoin was trading below $25,000, which was the result of most of the $4.2 billion options being placed at $26,500 or lower by bear bets. This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their research when making a decision. The views, thoughts, and opinions expressed here are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph. What is “PUT” in Cryptocurrencies? Put is an important option contract for cryptocurrency investors. This contract gives the right to sell a certain amount of cryptocurrency at a specific price within a certain period. The put option buyer believes that the cryptocurrency will fall below a certain price within a specific period. To make a profit, the buyer sells the cryptocurrency using the option. The specified price is the price that the cryptocurrency must reach to maintain the value of the put option contract. What is Call Open Interest? Call Open Interest refers to the total number of open positions for call options written on a specific cryptocurrency. This shows how many investors have open positions in a specific call option. Call option holders have the right to buy the cryptocurrency at a specific price on a specific date. Call Open Interest shows the number of investors who expect the cryptocurrency to rise. What is Put Open Interest? Put Open Interest refers to the total number of open positions for put options written on a specific cryptocurrency. This shows how many investors have open positions in a specific put option. Put option holders have the right to sell the cryptocurrency at a specific price on a specific date. Put Open Interest shows the number of investors who expect the cryptocurrency to fall. Bitcoin bulls are in a good position to profit from the $4.2 billion option expiration this week! was first published on CoinOtag.