Category: BTC Options

Bitcoin bulls target prices above $58K ahead of Friday’s $820M options expiry

Bitcoin bulls target prices above $58K ahead of Friday’s $820M options expiry

Everyone is talking about a six-figure Bitcoin (BTC) price now that the digital asset has broken out of its multi-month downtrend and confirmed that a bullish trend is in play. If Bitcoin happens to enter a parabolic move toward $110,000, that would finally match PlanB’s Stock-to-Flow model prediction. According to the pseudonymous analyst, the scarcity and valuation of gold and other precious metals and “Elon Musk’s energy FUD and China’s mining crackdown” are a few of the factors responsible for the past five months of 50% or higher inaccuracy in the model.Bulls’ hopes mostly cling to an exchange-traded fund being approved by the United States Securities and Exchange Commission. Currently, there are multiple requests pending review between Oct. 18 and Nov. 1, but the regulator could postpone its final decision.Oct. 15’s $830 million options expiry was largely impacted by the 20% price rally initiated on Oct. 4, which most likely eliminated 92% of the put (sell) options.Bitcoin price on Coinbase in USD. Source: TradingViewThe aftermath of China’s mining crackdown was an important event that might have fueled investor sentiment, and research shows the U.S. accounting for 35.4% of the Bitcoin hash rate. Furthermore, as Cointelegraph reported, the U.S. states of Texas and Ohio are also expected to receive additional large-scale Bitcoin mining centers, which will effectively boost the U.S. crypto market share even higher.The Oct. 8 expiry was profitable for bullsFollowing last week’s $370 million estimated net profit from the BTC options expiry, bulls had more firepower, and this is evident in this Friday’s $820 million expiry. This advantage explains why the call (buy) options open interest is 43% larger than the neutral-to-bearish put options.Bitcoin options aggregate open interest for Oct. 15. Source: BybtAs the above data shows, bears placed $335 million in bets for Friday’s expiry, but it appears that they were caught by surprise, as 92% of the put (sell) options are likely to become worthless.In other words, if Bitcoin remains above $56,000 on Oct. 15, only $36 million worth of neutral-to-bearish put options will be activated on Friday’s 8:00 am UTC expiry.Bulls have a reason to push BTC price above $58,000Below are the four likeliest scenarios for Oct. 15’s expiry. The imbalance favoring either side represents the theoretical profit. In other words, depending on the expiry price, the quantity of call (buy) and put (sell) contracts becoming active varies:Between $52,000 and $54,000: 3,140 calls vs. 2,110 puts. The net result is $55 million favoring the call (bull) instruments.Between $54,000 and $56,000: 3,700 calls vs. 1,240 puts. The net result is $130 million favoring the call (bull) instruments.Between $56,000 and $58,000: 4,850 calls vs. 680 puts. The net result is $235 million favoring the call (bull) instruments.Above $58,000: 6,230 calls vs. 190 puts. The net result is complete dominance, with bulls profiting $350 million.This raw estimate considers call options being exclusively used in bullish bets and put options in neutral-to-bearish trades. However, investors might have used a more complex strategy that typically involves different expiry dates.Bears need a 7% price correction to reduce their lossIn every scenario, bulls have absolute control of this Friday’s expiry, and there are a handful of reasons for them to keep the price above $56,000. On the other hand, bears need a 7% negative move below $54,000 to avoid a loss of $235 million or higher.Nevertheless, traders must consider that during bull runs, the amount of effort a seller needs to pressure the price is immense and usually ineffective. Analytics point to a considerable advantage from call (buy) options, fueling even more bullish bets next week.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.

Matrixport Launches ‘BTC-U Range Sniper’ — Returns Up to 200% for Accurate Predictions

Matrixport Launches ‘BTC-U Range Sniper’ — Returns Up to 200% for Accurate Predictions

The financial asset services platform Matrixport has introduced a variety of new products since the firm raised $100 million in a Series C financing round during the first week of August. Following the launch of the company’s “ETH2.0 Staking Earn” earning service, Matrixport has introduced another service product called “BTC-U Range Sniper” which allows traders to earn high returns when bitcoin values move within a specified price range.
Matrixport Launches Ether Staking and Range Sniper Bitcoin Product
The Singapore-based Matrixport has been unveiling a number of new products after the company revealed it raised $100 million last month. On August 25, the startup launched its “ETH2.0 Staking Earn” earning service, which provides ethereum (ETH) staking at a “low threshold.”
The product allows customers to “earn yield from ethereum lock-up rewards, while simultaneously benefitting from additional token rewards, mining revenues, and better liquidity from related [decentralized finance (defi)] projects.” On September 6, Matrixport revealed another new service called the “BTC-U Range Sniper.”
BTC-U Range Sniper participants can earn annualized returns “between 6% to 200% in either USDT/USDC or BTC” depending on the price of bitcoin (BTC) at the time of settlement.
There are three ways Range Sniper traders can settle. Either by earning a 6% APY minimum if the settlement price is above the given range, or if it is below the given range, “the principal will be converted to BTC with a minimum guarantee of 6% APY.” Lastly, if the chosen settlement price is on point and falls within the range, an investor can earn up to 200% in USDC.

Matrixport Executive: Range Sniper Allows People to ‘Ride Bitcoin’s Innate Volatility’
John Ge, co-founder and chief executive officer at Matrixport, explained that the Range Sniper product can be beneficial, like stablecoins. “Stablecoins are an important fiat on-ramp pathway and have been a great entry point for the crypto-curious,” Ge remarked.
“However,” the Matrixport executive added, “many stablecoin holders now desire to accumulate BTC whilst earning higher yields. ‘BTC-U Range Sniper’ is a user-friendly crypto investment product where we empower users to continue to earn attractive stablecoin yields or ride BTC’s innate volatility to accumulate more BTC.”
Matrixport calls itself a “one-stop crypto financial services” company and the startup details its services clear “$5 billion in monthly trading volumes.” The company competes with a number of exchanges that offer crypto options and perpetual swap products like Deribit, Okex, Ledgerx, and CME Group.
The exchange Deribit commands the top position, as far as bitcoin (BTC) options open interest and volume is concerned, according to Skew Analytics. However, Matrixport owns the derivatives exchange Bit.com, which is often the second or third largest options provider on a monthly basis with Okex.
What do you think about the BTC-U Range Sniper concept? Let us know what you think about this subject in the comments section below.

Tags in this story

Bit.com, bitcoin options, Bitcoin Products, BTC Options, BTC-U Range Sniper, CME Group, deribit, ETH 2.0, ETH staking, Finance, John Ge, LedgerX, Matrixport, Matrixport Series C, Okex, options, Skew analytics, volatility

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Read disclaimer

Bitcoin price stages a comeback as 3 indicators reflect BTC’s strength

Bitcoin price stages a comeback as 3 indicators reflect BTC’s strength

Bitcoin (BTC) price is still 4.4% down from its Aug. 23 high at $50,500, leading some traders to question whether the local top marked the end of the recent 34-day long bull run.Even with the current correction, derivatives data and the maneuvers of professional investors are not flashing any bearish signals.Bitcoin price in USD at Coinbase. Source: TradingViewOn Aug. 24, prominent technical analyst John Bollinger suggested that Bitcoin price could be pushed lower in the short term. A pseudonymous market analyst called ‘CryptoHamster’ shared a similar bearish outlook based on analyzing a technical pattern called an ascending channel.Bearish news coming from exchange regulation could have also diminished investors’ interest, and this week the United Kingdom’s Financial Conduct Authority (FCA) released a supervisory notice against Binance exchange.According to this week’s regulatory action, the exchange was asked to take down its live advertisements and promotions on Binance’s website and social media.A bullish trend can be seen in futures markets To assess whether professional traders became pessimistic, analysts should monitor the futures premium, also known as ‘basis.’ This indicator measures the price gap between futures prices and the regular spot market.The one-month contract should trade with a 6% to 14% annualized premium in healthy markets because sellers demand a higher price to postpone settlement, creating a price difference.Huobi 1-month futures basis. Source: SkewNotice how the indicator has improved from a neutral-to-bearish 4% annualized premium on Aug. 19 to a more healthy 9% level. This shows that the metric is moving in the opposite direction of the zone, which would be considered bearish.The top traders long-to-short ratio is still optimisticTo effectively measure how professional traders are positioned, investors should monitor the top traders’ long-to-short ratio at leading crypto exchanges. This metric provides a broader view of the traders’ effective net position by gathering data from multiple markets.Top traders BTC long/short ratio. Source: Bybt.comIt is worth noting that exchanges gather data on top traders differently because there are multiple ways to measure a clients’ net exposure. Therefore, any comparison between different providers should be made on percentage changes instead of absolute numbers.Both OKEx and Huobi displayed an increase in the top traders’ long-to-short ratio, indicating that either they closed short positions or opened long ones, which is a bullish move. Binance was the only exception because the indicator dropped, indicating some pessimism, but the variation over the past couple of days has been insignificant.Options markets are slightly bullishThe 25% delta skew compares similar call (buy) and put (sell) options side-by-side. It will turn positive when the protective put options premium is higher than similar risk call options.The opposite holds when market makers are bullish, and this causes the 25% delta skew indicator to enter the negative range.Deribit Bitcoin options 25% delta skew. Source: laevitas.chThe above chart shows that there had been some bearishness ahead of July 19, but Bitcoin options markets have flipped neutral since then. Moreover, there are no signs that professional traders are growing worried about a potential price drop because the 25% skew indicator remains near zero.Both futures and options markets show confidence from investors despite the worrisome technical analysis and shaky regulatory scenario. Consequently, at least according to derivatives markets, dips are for buying.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.

Here’s why Bitcoin bulls might trample $50K ahead of Friday’s $2B BTC options expiry

Here’s why Bitcoin bulls might trample $50K ahead of Friday’s $2B BTC options expiry

$2 billion worth of Bitcoin (BTC) options will expire on Friday, Aug. 27. Some analysts argue that a strong call (buy) option buying activity on Aug. 22 was likely the catalyst for the recent $50,000 price test.Digital asset trading firm QCP Capital mentioned in its market update that an entity has been “consistently pushing (option) prices higher in the last few weeks.” The activity, which took place during the morning trading session in Asia, aggressively bought bullish options in chunks of 100 BTC contracts each.The report also mentions the exhaustion of regulatory concerns in the near term, as crypto-related decisions from the Senate Banking Committee and regulators are unlikely to bear fruits in 2021.Bears might be analyzing different dataHowever, the most recent “The Week On Chain” report from blockchain analytics provider Glassnode included some concerning data from Bitcoin on-chain activity. Such analysis found that the amount of entity-adjusted transactions has not responded to the ongoing bullish action.Moreover, Decentrader, a crypto market-intelligence provider, highlighted insufficient trading volume during this recent move to push BTC’s price above $52,000. Bitcoin options aggregate open interest for Aug. 27. Source: Bybt.comFriday will be an important test of the $50,000 level, as 4,372 BTC option contracts await the $218 million decision.The initial call-to-put analysis shows the vast dominance of the neutral-to-bullish call instruments, with 60% larger open interest. Nevertheless, bulls might have been too optimistic, as 68% of their bets have been placed at $50,000 or higher.Related: Bitcoin rejects $51K after Michael Saylor reveals new BTC purchase — What’s next?91% of the put options will probably be worthless at expiryOn the other hand, 91% of the protective put options have been placed at $46,000 or below. Those neutral-to-bearish instruments will become worthless if Bitcoin trades above that price on Friday. The options expiry happens at 8:00 am UTC, so some additional volatility is expected ahead of the event.Below are the four most likely scenarios, considering the current price levels. The imbalance favoring either side represents the potential profit from the expiry considering calls (buy) options are more frequently used in bullish strategies, whereas protective puts are used in neutral-to-bearish trades.Below $45,000: 4,040 calls vs. 2,500 puts. The net result is a $69 million advantage for the neutral-to-bullish instruments.Above $46,000: 6,500 calls vs. 1,300 puts. The net result is $239 million favoring the neutral-to-bullish instruments.Above $48,000: 7,400 calls vs. 420 puts. The net result is a $335 million advantage for neutral-to-bullish instruments.Above $50,000: 12,000 calls vs. 35 puts. The net result is a $600 million advantage for neutral-to-bullish instruments.The above data shows how many contracts will be available on Friday, depending on the expiry price. There’s no way to measure the net result for every market participant as some investors could be trading more complex strategies, including market-neutral ones using both calls and protective puts.Those two competing forces will show their strength as bears will try to minimize the damage. Either way, bulls have complete control of Friday’s expiry, and there seem to be enough incentives for them to defend the $48,000 level and even try a more significant gain by pushing the price above $50,000.Meanwhile, bears should concentrate on the September expiry, although keeping in mind that El Salvador is expected to introduce Bitcoin as legal tender next month. In addition, the country is building the infrastructure to support a state-issued Bitcoin wallet called Chivo.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.

Back to top