Even when $525 million in Bitcoin options expire this Friday, the bulls are ready to defend the $15,000 level.
On November 13, a total of $525 million in open interest on Bitcoin options (BTC) will expire. This is similar to what was seen last week, when $470 million of open interest in options also expired. This presents some unusual activity as most of the volume goes through monthly and quarterly options.
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On November 5th (last Friday), the open interest on put options was 30% higher than on call options. The Deribit exchange has an open interest of USD 431 million for this Friday’s expiration and Bit.com has USD 72 million.
Before jumping to conclusions about whether this figure is bullish or bearish, it’s important to study it further to measure the potential buying and selling pressure near expiration.
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For example, the holder of an $18,000 call option won’t see much profit in bringing the price of Bitcoin to $16,500 with less than 32 hours to go. The market already considers these options to be worthless. We can say the same thing about a put up to $14,000.
Therefore, by excluding call options above $16,700 and put options below $14,400, traders can get a more realistic view of current market conditions.
Deribit BTC options for the November 13 expiration.
Deribit has 5,915 BTC in call options ranging from USD 14,000 to USD 15,750. Bit.com has 1,050 BTC and OKEx currently has 490 BTC. Therefore, there’s an immediate open interest of $117 million that supports current levels.
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Meanwhile, put options ranging from USD 15,250 to USD 16,500 amount to 2,130 BTC at Deribit, followed by 860 BTC at Bit.com, plus another 100 BTC from OKEx. Thus, immediate pressure from the sales side amounts to USD 48 million of open interest in put options.
The reason behind this difference is that most put options have devalued and are no longer worth anything on the market. This movement excludes the 84% open interest in put options of $298 million.
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Therefore, when only the option prices closer to market levels are analyzed, there is a notable imbalance of USD 69 million that favors the purchase side. As seen last week, there have been some large bearish trades probably related to the US elections.
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Regardless of whether the market is strong enough to overcome the $16,000 resistance, these short-term options currently support $15,500 and higher prices.
OKEx, Bit.com, and Deribit’s weekly contracts expire this November 13 at 8:00 a.m. (UTC).
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.