Fed pauses interest rates, but Bitcoin options data still points to BTC price downside

June 14, 2023 Coin Telegraph

calls

Fed Chair Jerome Powell announced a pause in interest rates, but Bitcoin options data still warns that a BTC price drop to $25,000 is possible.

Bitcoin's price has been pinned below $26,300 since June 10, reflecting a 14.8% correction in two months. Meanwhile, the Nasdaq tech stock market index gained 13.6% in the same period, indicating that investors are not exactly fleeing to the safety of cash and short-term debt. In fact, the demand for United States government bonds has been declining for the past six weeks.

*U.S. 2-year government bond yield. Source: TradingView*

The yield on two-year U.S. Treasurys, for example, increased from 3.80% on May 4 to 4.68% on June 14. Lower demand for debt instruments increases payouts, resulting in a higher yield. If the investor thinks that inflation will continue above target, the tendency is for those participants to demand a higher yield when trading bonds.

The U.S. Treasury is set to issue more than $850 billion in new bills between June and September. As additional debt issuance tends to cause higher yields, the market expects increased borrowing costs for families and businesses. Still, that does not explain why investors have been flocking to tech companies but avoiding Bitcoin (BTC), as depicted by the past two-month performance.

Eight consecutive weeks of crypto fund outflows

According to CoinShares' latest “Digital Asset Fund Flows Report,” the sector’s investment product outflows amounted to $88 million in the week ending on June 10. The substantial drawdown added to the ongoing eight-week streak of outflows, which now total $417 million.

The eight-week cumulative outflows for Bitcoin reached $254 million, representing approximately 1.2% of the total assets under management. Analysts at CoinShares have attributed this trend to monetary policy considerations, as interest rate hikes show no signs of slowing down, prompting investors to remain cautious.

Bitcoin has been trying to reclaim the $27,500 support for the past two weeks, but that might be harder than expected given the upcoming $600 million weekly options expiry on June 16.

A brief Bitcoin pump above $27,000 made bulls giddy

It is worth noting that the actual open interest for the options expiry will be lower since bulls concentrated their bets above $27,000. These traders likely got excessively optimistic after Bitcoin’s price gained 8% on June 6, erasing the losses that drove BTC down to $25,400.

*Bitcoin options aggregate open interest for June 16. Source: Deribit*

The 0.73 put-to-call ratio reflects the imbalance between the $350 million in call (buy) open interest and the $250 million in put (sell) options.

However, if Bitcoin’s price remains near $26,000 at 8:00 am UTC on June 16, only $27 million worth of these call (buy) options will be available. This difference happens because the right to buy Bitcoin at $27,000 or $28,000 is useless if BTC trades below that level on expiry.

Bulls need Bitcoin price at $26,500 to avoid a $100 million loss

Below are the three most likely scenarios based on the current price action. The number of options contracts available on June 16 for call (bull) and put (bear) instruments varies depending on the expiry price.

The imbalance favoring each side constitutes the theoretical profit:

Between $24,000 and $25,000: 0 calls vs. 6,100 puts. Bears are in total control, profiting $145 million.
Between $25,000 and $26,500: 1,000 calls vs. 4,400 puts. The net result favors the put (sell) instruments by $100 million.
Between $26,500 and $27,000: 2,200 calls vs. 2,800 puts. The net result is balanced between call and put instruments.

This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. This oversimplification disregards more complex investment strategies.

Still, traders should be cautious as the bears are currently in a better position for Friday’s weekly options expiry, favoring negative price moves. Thus, an eventual sharp correction below $25,000 should not be discarded.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin bears need BTC price to go below $27K ahead of Friday’s $900M options expiry

May 11, 2023 Coin Telegraph

<div>Bitcoin bears need BTC price to go below K ahead of Friday's 0M options expiry</div>

Analysis

Bitcoin price giving up ground over the past week to slide below $28,000 has put bears in a better position for Friday's expiry.

The $900 million Bitcoin (BTC) weekly options expiry on May 12 might play a decisive role in determining whether the price will succumb below $27,000.

Bitcoin price rejected again at $30,000

BTC bears will try to take advantage of macroeconomic headwinds, Silk Road coins' FUD, and uncertainty caused by Bitcoin’s transaction fee spike to pull Bitcoin's price down in the next few days.

*Bitcoin 4-h price movements during option expiries. Source: TradingView*

The BTC/USD pair broke above $29,800 on May 6, but the tide quickly changed as the resistance proved stronger than anticipated.

The subsequent 8.2% two-day correction tested $27,400 support, favoring the thesis of sideways trading as investors evaluate the economic crisis dynamic and its potential impact on cryptocurrencies.

Meanwhile, Berkshire Hathaway owner and billionaire investor Warren Buffett is no longer optimistic about the U.S. economy’s growth. Such a pessimistic scenario for the global economy might explain why some Bitcoin traders decided to reduce exposure over the past week, greatly reducing the odds of breaking $30,000.

Bitcoin options: bulls were excessively optimistic

The open interest for the May 12 options expiry is $900 million, but the actual figure will be lower since bears were expecting sub-$28,000 price levels.

These traders got excessively optimistic after Bitcoin’s price rallied 11.2% between April 9 and April 14, testing the $31,000 resistance.

*Bitcoin options aggregate open interest for May 12. Source: CoinGlass*

The 1.65 call-to-put ratio reflects the imbalance between the $560 million in call (buy) open interest and the $340 million in put (sell) options.

But if Bitcoin’s price remains near $27,500 at 8:00 am UTC on May 12, only $11 million worth of these call (buy) options will be available. This difference happens because the right to buy Bitcoin at $28,000 or $29,000 is useless if BTC trades below that level on expiry.

Bitcoin bulls aim for $28,000 to balance the scales

Below are the four most likely scenarios based on the current price action. The number of options contracts available on May 12 for call (bull) and put (bear) instruments varies, depending on the expiry price.

The imbalance favoring each side constitutes the theoretical profit:

Between $25,000 and $27,000: 100 calls vs. 9,900 puts. Bears in total control, profiting $230 million.
Between $27,000 and $28,000: 400 calls vs. 5,000 puts. The net result favors the put (sell) instruments by $120 million.
Between $28,000 and $29,000: 1,500 calls vs. 2,100 puts. The result is balanced between put and call options.
Between $29,000 and $30,000: 3,300 calls vs. 800 puts. The net result favors the call (bull) instruments by $70 million.

This crude estimate considers the call options used in bullish bets and the put options exclusively in neutral-to-bearish trades. Even so, this oversimplification disregards more complex investment strategies.

For instance, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a specific price. Unfortunately, there’s no easy way to estimate this effect.

Ultimately, after it became clear that the Bitcoin network was working as designed, the selling pressure dissipated, causing Bitcoin’s price to stabilize around $27,500. Nevertheless, traders should be cautious as the bears are still in a better position for Friday’s weekly options expiry, favoring negative price moves.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin bulls aim to hold this week’s BTC gains leading into Friday’s $675M options expiry

February 16, 2023 Coin Telegraph

Bitcoin bulls aim to hold this week’s BTC gains leading into Friday’s 5M options expiry

BUSD

$675 million in BTC options are set to expire on Feb. 17, but bears could aim to take control by pushing Bitcoin price below $22,000.

While the U.S. Federal Reserve (FED) continues to monitor the overheated economy, the most likely scenario is further interest rate hikes to curb inflation. The unintended consequence is the heightened government debt cost, creating a bullish environment for scarce assets such as commodities, stock market and cryptocurrencies.

Bitcoin’s price gain practically extinguished bears expectation for a sub-$21,500 options expiry on Feb. 17, so their bets are unlikely to pay off as the deadline approaches.

Bitcoin investors' primary concern is the possibility of further impacts from regulators following the staking rewards program by the Kraken exchange being halted by the U.S. Securities and Exchange Commission on Feb. 9 and the crackdown on Binance USD (BUSD) stablecoin issuing on Feb. 13.

Even if the newsflow remains negative, bulls still can profit in Friday's Feb. 17 options expiry by keeping the BTC price above $22,500, but the situation can easily flip and favor bears.

Bears were not expecting the $22,000 level to hold

The open interest for the Feb. 17 options expiry is $675 million, but the actual figure will be lower since bears were expecting sub-$22,000 price levels. These traders became overconfident after Bitcoin traded below $21,500 on Feb. 13.

*Bitcoin options aggregate open interest for Feb. 17. Source: CoinGlass*

The 1.12 call-to-put ratio reflects the imbalance between the $355 million call (buy) open interest and the $320 million put (sell) options. If Bitcoin's price remains near $22,700 at 8:00 am UTC on Feb. 17, only $24 million worth of these put (sell) options will be available. This difference happens because the right to sell Bitcoin at $21,000 or $22,000 is useless if BTC trades above that level on expiry.

Bulls aim for $23k to secure a $155 million profit

Below are the four most likely scenarios based on the current price action. The number of options contracts available on Feb. 17 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:

Between $21,000 and $22,000: 700 calls vs. 5,500 puts. The net result favors the put (bear) instruments by $100 million.
Between $22,000 and $22,500: 1,800 calls vs. 1,500 puts. The net result is balanced between bears and bulls.
Between $22,500 and $23,000: 3,800 calls vs. 1,100 puts. The net result favors the call (bull) instruments by $60 million.
Between $23,000 and $24,000: 6,900 calls vs. 200 puts. The net result favors the call (bull) instruments by $155 million.

For example, a trader could have sold a call option, effectively gaining negative exposure to Bitcoin above a specific price, but unfortunately, there's no easy way to estimate this effect.

Bears might benefit from the impact of regulation

Bitcoin bulls need to push the price above $23,000 on Feb. 17 to secure a potential $155 million profit. On the other hand, the bears' best-case scenario requires a 3.5% dump below $22,000 to maximize their gains.

Considering the negative pressure from regulators, bears have good odds of flipping the table and avoiding a $60 million or larger loss on Feb. 17.

More importantly, looking at a broader time frame, there is little room for the FED to slow down the economy without spiraling the debt interest repayments out of control.

Friday will be an interesting display of strength between the short-term impact of a hostile crypto regulation environment versus Bitcoin's long-term scarcity and censorship resistance benefits.

Bitcoin (BTC) price gained 6.3% just two days after reaching $21,370 on Feb. 13, which was the lowest level seen in more than three weeks. The price recovery can be partially explained by the Feb. 14 U.S. Consumer price index data displaying a 6.4% increase in year-over-year inflation in January.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Stock price for troubled Bitcoin miner Core Scientific surges 200%

December 16, 2022 Coin Telegraph

$72M

After a flurry of bad news throughout 2022, the miner has been offered a lifeline that could enable it to see out the current crypto winter.

Bitcoin (BTC) miner Core Scientific’s stock has soared nearly 200% in the past four days, following the positive reception for a Dec. 14 financing proposal from a current creditor that is hoping the firm can avoid bankruptcy.

Shares for the embattled miner were sitting just over 13 cents on Dec. 12, before climbing to nearly 40 cents as the market closed on Dec. 15 — a gain of 198%.

*A five-day chart showing Core Scientific’s share price on Nasdaq. Source: TradingView*

According to financial media firm Marketbeat, traders acquired 6,572 call options on Dec. 15, 136% more than the average volume of 2,780, indicating that many are bullish on the stock and are betting that the price will continue rising.

Some members of the Bitcoin community were also acquiring shares, hoping for a huge return if the financing plan goes through and the firm can survive through the bear market.

Bought a slug of $CORZ at the close. If the financing goes through and they can survive through the bear market, this trade could become an absolute MONSTER. DYOR. For your reference: pic.twitter.com/eHF4NXjcvH
— CR (@CashRocket) December 14, 2022

The rally could be the start of a turnaround, or just a dead cat bounce. Core Scientific was hit with a run of bad news throughout 2022 and despite recent gains the price is still 95% lower than it was at the start of the year.

On Dec. 14 financial services platform B. Riley wrote a letter to Core’s shareholders and lenders, outlining a $72 million financing plan that it believes is sufficient to prevent the miner from being forced to file for Chapter 11 bankruptcy.

Should the deal be accepted, the first $40 million would be funded “immediately, with zero contingencies,” while the rest of the funds would be issued if Core agrees to suspend payments to equipment lenders until the price of Bitcoin is back above $18,500 — a price the leading cryptocurrency has been below since Nov. 9.

B. Riley suggests the financing will provide Core with two years of operating cash, and notes that their analyst forecasts that the miner can generate annual earnings of approximately $165 million at a Bitcoin price of $18,000, with an extra $20 million for each $1,000 price increase.

Core was hit hard by the broader market downturn and filed a report on Oct. 26 citing a low BTC price, high electricity rates and a refusal from bankrupt crypto lender Celsius to repay a $2.1 million loan as reasons why it might default on some of its debts.

The bad news continued on Nov. 22, when the miner admitted in a quarterly report that its cash reserves may be depleted by the end of 2022 and it did not believe it would be able to raise funds through financing or capital markets given the current market conditions.

Central Bank of Armenia Urged to Regulate Cryptocurrencies

June 3, 2022 Bitcoin.com

Bitcoin bulls target prices above $58K ahead of Friday’s $820M options expiry

October 13, 2021 Coin Telegraph

Bitcoin bulls target prices above K ahead of Friday’s 0M options expiry

BTC Options

$820 million in BTC options expire on Oct. 15, and data signals that bulls are set to celebrate another positive week.

Everyone is talking about a six-figure Bitcoin (BTC) price now that the digital asset has broken out of its multi-month downtrend and confirmed that a bullish trend is in play.

If Bitcoin happens to enter a parabolic move toward $110,000, that would finally match PlanB’s Stock-to-Flow model prediction. According to the pseudonymous analyst , the scarcity and valuation of gold and other precious metals and “Elon Musk’s energy FUD and China’s mining crackdown” are a few of the factors responsible for the past five months of 50% or higher inaccuracy in the model.

Bulls’ hopes mostly cling to an exchange-traded fund being approved by the United States Securities and Exchange Commission. Currently, there are multiple requests pending review between Oct. 18 and Nov. 1, but the regulator could postpone its final decision.

Oct. 15’s $830 million options expiry was largely impacted by the 20% price rally initiated on Oct. 4, which most likely eliminated 92% of the put (sell) options.

*Bitcoin price on Coinbase in USD. Source: TradingView*

The aftermath of China’s mining crackdown was an important event that might have fueled investor sentiment, and research shows the U.S. accounting for 35.4% of the Bitcoin hash rate.

Furthermore, as Cointelegraph reported, the U.S. states of Texas and Ohio are also expected to receive additional large-scale Bitcoin mining centers, which will effectively boost the U.S. crypto market share even higher.

The Oct. 8 expiry was profitable for bulls

Following last week’s $370 million estimated net profit from the BTC options expiry, bulls had more firepower, and this is evident in this Friday’s $820 million expiry. This advantage explains why the call (buy) options open interest is 43% larger than the neutral-to-bearish put options.

*Bitcoin options aggregate open interest for Oct. 15. Source: Bybt*

As the above data shows, bears placed $335 million in bets for Friday’s expiry, but it appears that they were caught by surprise, as 92% of the put (sell) options are likely to become worthless.

In other words, if Bitcoin remains above $56,000 on Oct. 15, only $36 million worth of neutral-to-bearish put options will be activated on Friday’s 8:00 am UTC expiry.

Bulls have a reason to push BTC price above $58,000

Below are the four likeliest scenarios for Oct. 15’s expiry. The imbalance favoring either side represents the theoretical profit. In other words, depending on the expiry price, the quantity of call (buy) and put (sell) contracts becoming active varies:

Between $52,000 and $54,000: 3,140 calls vs. 2,110 puts. The net result is $55 million favoring the call (bull) instruments.
Between $54,000 and $56,000: 3,700 calls vs. 1,240 puts. The net result is $130 million favoring the call (bull) instruments.
Between $56,000 and $58,000: 4,850 calls vs. 680 puts. The net result is $235 million favoring the call (bull) instruments.
Above $58,000: 6,230 calls vs. 190 puts. The net result is complete dominance, with bulls profiting $350 million.

This raw estimate considers call options being exclusively used in bullish bets and put options in neutral-to-bearish trades. However, investors might have used a more complex strategy that typically involves different expiry dates.

Bears need a 7% price correction to reduce their loss

In every scenario, bulls have absolute control of this Friday’s expiry, and there are a handful of reasons for them to keep the price above $56,000. On the other hand, bears need a 7% negative move below $54,000 to avoid a loss of $235 million or higher.

Nevertheless, traders must consider that during bull runs, the amount of effort a seller needs to pressure the price is immense and usually ineffective. Analytics point to a considerable advantage from call (buy) options, fueling even more bullish bets next week.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Here’s why Bitcoin bulls might trample $50K ahead of Friday’s $2B BTC options expiry

August 24, 2021 Coin Telegraph

Here’s why Bitcoin bulls might trample K ahead of Friday’s B BTC options expiry

Bitcoin Price

Bitcoin has lost the $50,000 level but derivatives data lays out a few good reasons why bulls might march on the resistance level ahead of Friday’s $2 billion BTC options expiry.

$2 billion worth of Bitcoin (BTC) options will expire on Friday, Aug. 27. Some analysts argue that a strong call (buy) option buying activity on Aug. 22 was likely the catalyst for the recent $50,000 price test.

Digital asset trading firm QCP Capital mentioned in its market update that an entity has been "consistently pushing (option) prices higher in the last few weeks." The activity, which took place during the morning trading session in Asia, aggressively bought bullish options in chunks of 100 BTC contracts each.

The report also mentions the exhaustion of regulatory concerns in the near term, as crypto-related decisions from the Senate Banking Committee and regulators are unlikely to bear fruits in 2021.

Bears might be analyzing different data

However, the most recent "The Week On Chain" report from blockchain analytics provider Glassnode included some concerning data from Bitcoin on-chain activity. Such analysis found that the amount of entity-adjusted transactions has not responded to the ongoing bullish action.

Moreover, Decentrader, a crypto market-intelligence provider, highlighted insufficient trading volume during this recent move to push BTC's price above $52,000.

*Bitcoin options aggregate open interest for Aug. 27. Source: Bybt.com*

Friday will be an important test of the $50,000 level, as 4,372 BTC option contracts await the $218 million decision.

The initial call-to-put analysis shows the vast dominance of the neutral-to-bullish call instruments, with 60% larger open interest. Nevertheless, bulls might have been too optimistic, as 68% of their bets have been placed at $50,000 or higher.

91% of the put options will probably be worthless at expiry

On the other hand, 91% of the protective put options have been placed at $46,000 or below. Those neutral-to-bearish instruments will become worthless if Bitcoin trades above that price on Friday. The options expiry happens at 8:00 am UTC, so some additional volatility is expected ahead of the event.

Below are the four most likely scenarios, considering the current price levels. The imbalance favoring either side represents the potential profit from the expiry considering calls (buy) options are more frequently used in bullish strategies, whereas protective puts are used in neutral-to-bearish trades.

Below $45,000: 4,040 calls vs. 2,500 puts. The net result is a $69 million advantage for the neutral-to-bullish instruments.
Above $46,000: 6,500 calls vs. 1,300 puts. The net result is $239 million favoring the neutral-to-bullish instruments.
Above $48,000: 7,400 calls vs. 420 puts. The net result is a $335 million advantage for neutral-to-bullish instruments.
Above $50,000: 12,000 calls vs. 35 puts. The net result is a $600 million advantage for neutral-to-bullish instruments.

The above data shows how many contracts will be available on Friday, depending on the expiry price. There's no way to measure the net result for every market participant as some investors could be trading more complex strategies, including market-neutral ones using both calls and protective puts.

Those two competing forces will show their strength as bears will try to minimize the damage. Either way, bulls have complete control of Friday's expiry, and there seem to be enough incentives for them to defend the $48,000 level and even try a more significant gain by pushing the price above $50,000.

Meanwhile, bears should concentrate on the September expiry, although keeping in mind that El Salvador is expected to introduce Bitcoin as legal tender next month. In addition, the country is building the infrastructure to support a state-issued Bitcoin wallet called Chivo.

Over $4 Billion in Bitcoin Options Set to Expire Friday, BTC Derivatives Markets Still Frothy

April 27, 2021 Bitcoin.com

calls

Eight consecutive weeks of crypto fund outflows

A brief Bitcoin pump above $27,000 made bulls giddy

Bulls need Bitcoin price at $26,500 to avoid a $100 million loss

Bitcoin price rejected again at $30,000

Bitcoin options: bulls were excessively optimistic

Bitcoin bulls aim for $28,000 to balance the scales

Bears were not expecting the $22,000 level to hold

Bulls aim for $23k to secure a $155 million profit

Bears might benefit from the impact of regulation

The Oct. 8 expiry was profitable for bulls

Bulls have a reason to push BTC price above $58,000

Bears need a 7% price correction to reduce their loss

Bears might be analyzing different data

91% of the put options will probably be worthless at expiry

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