128 Interactions, 4 today
Bullish Bitcoin moves from El Salvador, Victory Capital, and MicroStrategy salvaged the day by providing a much-needed lift to bulls and offsetting Friday’s BTC options expiry.
A total of $565 million in Bitcoin (BTC) options are slated to expire on Friday, June 11. This is essential because the previous few weeks have been a huge deception for bulls. After all, the price was battling to hold the $33,000 level.
However, an unexpected bullish turn of events led to an 18.5% hike from the $31,000 low on June 8 to $38,491 today. This strong move saved the bulls because any level below $34,000 would have wiped 98% of the current call (buy) options.
Who saved the day?
First, on June 8, MicroStrategy, a publicly listed firm that owns over $3.2 billion in Bitcoin, completed a $500 million bond issue, the proceeds of which would be used to purchase additional BTC.
El Salvador’s Legislative Assembly recognised Bitcoin as legal money on the same day. All companies, according to President Nayib Bukele, would be required to take Bitcoin. In addition, the government stated that it will ultimately keep $150 million in BTC in a trust fund.
On June 8, Victory Capital, a $157 billion asset manager, revealed plans to invest in a private fund that would monitor the Nasdaq Crypto Index. 62% comprised of Bitcoin, 32% Ether (ETH), and 6% in other altcoins.
Do bulls or bears have the upper hand?
The first picture favours bears somewhat since the call-to-put ratio is 0.93, despite the fact that this indicator rates all options equally. However, the right to purchase Bitcoin for $42,000 in less than 24 hours is presently worthless, therefore this call option is selling for less than $40 per contract.
The neutral-to-bearish put options at $30,000 and lower have a similar impact. Holders gain nothing by rolling it over for the next several weeks because these contracts have also become worthless. As a result, analysts should focus on the $33,000 to $41,000 area to better analyse how traders are positioned for Friday’s options expiry.
On June 9, Bitcoin increased by more than 11% to $37,100, causing certain neutral-to-bullish call options to enter a profitable position. With less than 24 hours till Friday’s expiry, the call (buy) options up to $41,000 total 3,235 BTC contracts, worth $120 million at the time of writing.
The neutral-to-bearish put options down to $33,000 total 3,045 BTC contracts, which are now worth at $113 million. As a result, both sides are about even for Friday’s expiration.
Bears would have had a $84 million advantage if Bitcoin had remained below $34,000, but the sequence of positive developments appears to have been just enough to save the situation.
While there is no certainty that the price will remain stable, the incentives for both parties to exert pricing pressure are now balanced.