1,328 Interactions, 4 today
At the moment, the pricing action associated with Bitcoin is a little perplexing. Why is this the case? Since the market’s bulls and bears are still biding their time in the indexes, there is no definite path.
BTC was hovering around $59,500 at the time of publishing, after selling pressure had driven it down to $55,000 on the charts. If the market has stayed volatile, a major shift in terms of breaking above or below a key price range may occur by the end of the month.
26 March: Why is it important to note?
The meaning of the above date is relevant to the futures market, especially the Options market. The number of active contracts in the Options market is determined by open interest, which is a measure of the volume of liquidity at specific expiration dates.
The next quarterly expiry date for big Options and post-expiry is March 26, and we could see a corresponding shift in the Bitcoin price market.
The attached graph depicts the growth reported following the previous two quarterly expirations. For example, on September 25, 2020, a bullish era began, allowing Bitcoin to surpass its previous all-time high of $20,000.
Following the expiration of the December 25 futures, Bitcoin started another bullish leg, climbing over $50,000 in less than two months.
Right now, the Open Interest on BTC Options for March 26th, 2021 is higher than for any other recent expiry date. This means that the 26th is gaining the most liquidity in the derivatives industry right now.
We are now less than 10 days out from the next big expiry, but it is important to remember that the demand might not be as transparent or positive as it was previously. Price fluctuations may be drastic in any direction, and we can see a new local low or a new peak in the short term.
Are Bitcoin CME Options indicative of the direction?
According to a new Ecoinometrics survey, the number of put buys has increased in the last month. At the time of publishing, there were three put sales for every four call transactions, the best puts-to-calls ratio in over a year. Although this did suggest a fall in bullish enthusiasm for Bitcoin, the strike prices for these puts were in the $40,000-$60,000 range. As a result, the required corrections are well inside the acceptable range.
It should be remembered, however, that BTC CME Options do not reflect the entire market environment, as CME contracts are currently around 1,500, which is equal to around 7,500 BTC.