People are talking about the current six-digit Bitcoin (BTC) price as the digital asset broke out of a multi-month downtrend and confirmed that an uptrend is in the works.
If Bitcoin happened to enter a parabolic move towards USD 110,000, it would ultimately be in line with the predictions of PlanB’s stock-to-flow model. According to the pseudonymous analyst, the scarcity and valuation of gold and other precious metals, as well as “Elon Musk’s energy FUD and China’s mining crackdown” are some of the factors that have resulted in an accuracy of 50% or greater in the model over the past five months.
The bulls’ hopes are largely based on an exchange-traded fund approved by the US Securities and Exchange Commission. There are currently several requests pending for consideration between October 18 and November 1, but the regulator may postpone its final decision.
The $ 830 million option expiration on October 15th was largely influenced by the 20% bull run that began on October 4th and most likely eliminated 92% of the put option (put).
The aftermath of China’s raid on the mining industry is a key event that could boost investor sentiment, and research shows the U.S. accounts for 35.4% of Bitcoin’s hash rate.
In addition, the US states of Texas and Ohio are expected to receive more large bitcoin mining hubs, as Cointelegraph reported, which will increase the US crypto market share.
The October 8 expiration brought profits for the bulls
After last week’s estimated net gain of around $ 370 million from the expiration of BTC options, the bulls gained more firepower, and this was evident in the $ 820 million expiration on Wednesday. This advantage explains why the open interest of a call is 43% higher than that of a neutral to bearish put.
As the data above shows, the bears placed $ 335 million in bets by Friday’s expiration, but it looks like they got caught by surprise as 92% of put options are likely to become priceless.
In other words, if Bitcoin is still above $ 56,000 on October 15, only $ 36 million of neutral to bearish put options will be activated on Friday, which will expire at 8 a.m. UTC.
Bulls have reason to push BTC price above $ 58,000
Here are the four most likely scenarios for the October 15th expiration: An imbalance in favor of either party represents a theoretical gain. In other words, the number of active call (buy) and put (sell) contracts is each depending on the expiry price:
- From $ 52,000 to $ 54,000: 3,140 calls versus 2,110 bookings. Net income is $ 55 million in favor of call (bull) instruments.
- From $ 54,000 to $ 56,000: 3,700 calls versus 1,240 bookings. The net result is $ 130 million coping support.
- From $ 56,000 to $ 58,000: 4,850 calls versus 680 bookings. The net result is $ 235 million coping support.
- Over $ 58,000: 6,230 calls versus 190 calls. The net result was complete dominance, with the bulls making $ 350 million.
This rough estimate assumes that the call will only be used in bullish bets and puts the option in neutral to bearish trades. However, investors could have used a more complex strategy that often involves different expiration dates.
Bears need a 7% price correction to reduce losses
In any case, the bulls have absolute control over this Friday deadline and there are several reasons for them to keep the price above $ 56,000. On the flip side, the bears need a 7% negative move below $ 54,000 to avoid a loss of $ 235 million or more.
However, traders need to be aware that during rallies, sellers’ attempts to put pressure on prices are enormous and often ineffective. The analysis suggests a significant advantage of call (buy) options, which will keep bets bullish next week.