After another week of bitcoin price volatility, including a new historical record, a new options record expiring on March 26 could play a key role in price action and the continuation of this volatility in the coming days.
Options are a contract for the right to buy or sell an asset at a certain price. According to data analytics company Bybt, there are more than 100,000 BTCs – the equivalent of $ 5,574,000,000 (given the bitcoin price of $ 55,740 at the time of writing) – of options that will expire Friday, March 26, in numerous exchanges major. This will make for an interesting trading session that will lead to the weekend.
This level of expiring options will set a new record, exceeding the $ 4 billion mark set at the end of January this year. The price of bitcoin on January 31 closed at just over $ 33,000, which means that bitcoin has appreciated by almost 100% since the expiration of the previous record of options.
Open interest in bitcoin options has increased this year, more than twice since the end of last year, from about $ 5 billion to nearly $ 14 billion. In options, there are calls (bets that the price will increase) and there are powers (bets that the price will lower). Overall, the market has an upward trend, with a current call-to-put ratio at 1.11. Anything above one is optimistic, which means that at a ratio of 1.18, the market is leaning 11% in favor of more future growth.
The put options appear to target the $ 40,000 range and the $ 47,500 range, while Friday’s call options look at the $ 60,000 range.
If the past is an indication of what is to come, this should imply some short-term volatility, but eventually more up in the coming weeks after expiration.
This is a guest post by William Clement III. The views expressed are entirely their own and do not necessarily reflect those of BTC Inc. or Bitcoin Magazine.