{"id":8910,"date":"2022-12-02T08:55:36","date_gmt":"2022-12-02T08:55:36","guid":{"rendered":"https:\/\/cryptoheretostay.com\/?p=8910"},"modified":"2022-12-02T08:55:37","modified_gmt":"2022-12-02T08:55:37","slug":"bitcoin-price-volatility-expected-ahead-of-fridays-430m-btc-options-expiry","status":"publish","type":"post","link":"https:\/\/cryptoheretostay.com\/?p=8910","title":{"rendered":"Bitcoin price volatility expected ahead of Friday\u2019s $430M BTC options expiry"},"content":{"rendered":"<script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"crypto\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script>\n<p>Bitcoin (BTC) has been stuck below the $18,600 resistance for the past 19 days and while bears successfully breached the $16,000 support on Nov. 21, the 8% range is pretty narrow for an asset class with 60% annualized volatility.<\/p>\n<p>This gives investors good reason to doubt that BTC price will hold its current gains leading into the $430 million BTC options expiry on Dec. 2.<\/p>\n<p><em>Bitcoin\/USD price index, 12-hour chart. Source: TradingView<\/em><\/p>\n<p>Investors are still unsure about whether $15,500 was the Bitcoin bottom and the consequences of the FTX and Alameda Research demise continue to emerge. The latest contagion victim was Auros Global, an algorithmic trading and market-making firm, which missed a repayment on a decentralized finance loan.<\/p>\n<p>Regulatory uncertainty also continues to limit Bitcoin&#8217;s price ascension, especially after United States Senator Elizabeth Warren reinforced the importance of blocking direct exposure of the insured financial institutions and the &#8220;highly speculative activity, highly leveraged, and vulnerable&#8221; crypto space.<\/p>\n<p>Considering these risks, it seems essential that bulls defend $17,000 ahead of the Dec. 2 options expiry. <\/p>\n<h2>Bears placed most of their bets below $16,500<\/h2>\n<p>The open interest for the Dec.2 options expiry is $430 million, but the actual figure will be lower since bears were overly-optimistic. These traders completely missed the mark by placing bearish bets between $12,000 and $15,000 after Bitcoin lost the $16,000 support on Nov. 21.<\/p>\n<p><em>Bitcoin options aggregate open interest for Dec. 2. Source: CoinGlass<\/em><\/p>\n<p>The 0.88 call-to-put ratio shows the dominance of the $230 million put (sell) open interest against the $200 million call (buy) options. Nevertheless, as Bitcoin stands near $17,000, most bearish bets will likely become worthless.<\/p>\n<p>If Bitcoin&#8217;s price remains above $17,000 at 8:00 am UTC on Dec. 2, only $4 million of these put (sell) options will be available. This difference happens because a right to sell Bitcoin at $16,000 or $17,000 is worthless if BTC trades above that level on expiry.<\/p>\n<h2>Bulls still have a slight chance<\/h2>\n<p>Below are the four most likely scenarios based on the current price action. The number of Bitcoin options contracts available on Dec. 2 for call (bull) and put (bear) instruments varies, depending on the expiry price. The imbalance favoring each side constitutes the theoretical profit:<\/p>\n<p><strong>Between $15,500 and $16,500:<\/strong> 600 calls vs. 3,100 puts. The net result favors the put (bear) instruments by $40 million.<strong>Between $16,500 and $17,000:<\/strong> 1,700 calls vs. 1,400 puts. The net result is balanced between calls and puts.<strong>Between $17,000 and $18,000:<\/strong> 6,200 calls vs. 100 puts. The net result favors the call (bull) instruments by $110 million.<strong>Between $18,000 and $19,000:<\/strong> 8,600 calls vs. 0 puts. The net result favors the call (bull) instruments by $160 million.<\/p>\n<p>This crude estimate considers the put options used in bearish bets and the call options exclusively in neutral-to-bullish trades. Even so, this oversimplification disregards more complex investment strategies.<\/p>\n<p>For example, a trader could have sold a put option, effectively gaining positive exposure to Bitcoin above a specific price, but unfortunately, there&#8217;s no easy way to estimate this effect.<\/p>\n<p><strong>Related:\u00a0<em>CFTC chief says Bitcoin is the only commodity in the wake of FTX collapse<\/em><\/strong><\/p>\n<h2>Pending regulation and contagion risk help to raise investors&#8217; fear<\/h2>\n<p>During bear markets, it\u2019s easier to negatively impact Bitcoin price due to the outsized effect negative newsflow has on the crypto market. <\/p>\n<p>For example, Binance exchange moved $2 billion worth of Bitcoin on Nov. 28, triggering concerns in the community. <\/p>\n<p>The transaction raised investors&#8217; eyebrows because Binance CEO Changpeng Zhao had previously declared that it&#8217;s bad news when exchanges move large amounts of crypto to prove their wallet address. Consequently, odds are bears will likely be able to push the Bitcoin price below $17,000 and avoid a potential $110 million loss.<\/p>\n<p>More importantly, the bulls&#8217; best-case scenario requires a pump above $18,000 to extend their gains to $160 million \u2014 rather improbable considering the lingering regulatory and contagion risks. So, for now, bears seem to have control over Friday&#8217;s expiry, despite being overconfident.<\/p>\n<p class=\"post-content__disclaimer\">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.\n<\/p>\n<p class=\"post-content__disclaimer\">The views, thoughts and opinions expressed here are the authors\u2019 alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.\n<\/p>\n<p><script type=\"text\/javascript\">\r\namzn_assoc_placement = \"adunit0\";\r\namzn_assoc_tracking_id = \"totafreearti-20\";\r\namzn_assoc_ad_mode = \"search\";\r\namzn_assoc_ad_type = \"smart\";\r\namzn_assoc_marketplace = \"amazon\";\r\namzn_assoc_region = \"US\";\r\namzn_assoc_default_search_phrase = \"bitcoin\";\r\namzn_assoc_default_category = \"All\";\r\namzn_assoc_search_bar = \"false\";\r\namzn_assoc_title = \"\";\r\namzn_assoc_rows =\"1\";\r\n<\/script>\r\n<script src=\"\/\/z-na.amazon-adsystem.com\/widgets\/onejs?MarketPlace=US\"><\/script><br \/>\n<br \/><a href=\"https:\/\/cointelegraph.com\/news\/bitcoin-price-volatility-expected-ahead-of-friday-s-430m-btc-options-expiry\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin (BTC) has been stuck below the $18,600 resistance for the past 19 days and while bears successfully breached the $16,000 support on Nov. 21, the 8% range is pretty narrow for an asset class with 60% annualized volatility. This gives investors good reason to doubt that BTC price will hold its current gains leading [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":8911,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_wp_rev_ctl_limit":""},"categories":[2],"tags":[],"class_list":["post-8910","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bitcoin-news"],"_links":{"self":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8910"}],"version-history":[{"count":1,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8910\/revisions"}],"predecessor-version":[{"id":8912,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/posts\/8910\/revisions\/8912"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=\/wp\/v2\/media\/8911"}],"wp:attachment":[{"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8910"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8910"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/cryptoheretostay.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}