$1.1 Bln Options Expire Today On Friday - Can This the Reason For Sudden Bitcoin Price Fall?

$1.1 Bln Options Expire Today On Friday - Can This the Reason For Sudden Bitcoin Price Fall?

2021-11-19 | Mike Hallen

$1.1 Bln Options Expire Today On Friday - Can This the Reason For Sudden Bitcoin Price Fall?

When Bitcoin traded above $68,000 last week, bulls enjoyed a $715 million edge, but the latest fall provides bearish an opportunity to turn the tables. Bulls in Bitcoin (BTC) were ecstatic when the price climbed over $69,000 on Nov. 10 because the 14.5% raise over five days meant they'd be in line for a $715 million profit when options expire on Nov. 12. The 9% price drop on Nov. 16 surprised bulls, especially since most call (buy) options for Nov. 19 were priced at $66,000 or higher. Surprisingly, that level of pricing has been the exception rather than the rule. Because the two unfavorable incidents occurred during the last several days, the Bears may have been lucky. The US Securities and Exchange Commission declined VanEck's request for a spot Bitcoin ETF on November 12. But it was the reasoning behind the rejection that was more crucial than the rejection itself, which was widely predicted. The SEC expressed its concerns regarding Tether's (USDT) stablecoin, as well as the inability to prevent fraud and market manipulation in Bitcoin trading. The refusal came as no surprise to Bloomberg senior ETF analyst and bitcoin specialist Eric Balchunas, who had predicted a 1% probability of acceptance. Furthermore, on Nov. 15, US President Joe Biden signed the infrastructure bill, which requires digital asset transactions worth more than $10,000 to be reported to the Internal Revenue Service beginning in 2024. Given the aforementioned situation, bulls are likely to rue their lack of more prudent wagers on the $1.1 billion weekly options expiration on Nov. 19. On the surface, the $630 million call (buy) options appear to have a 35% advantage over the $470 million puts (sell) options. Even yet, the 1.35 call-to-put ratio is misleading because most optimistic wagers will almost certainly be wiped off by the recent price drop. Bulls Still Require a 6% Price Increase Bulls can only make a large profit on Nov. 19 if they can drive Bitcoin's price beyond $64,000, which is 6% higher than the current $60,400. If the present short-term bearish attitude continues, bears might apply pressure and try to profit up to $220 million if the Bitcoin price remains near $58,000. Data from the options markets now favor put (sell) options, lowering the chances of a rise before Nov. 19.

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